The Middle East has emerged as a key market for retailers across the world. The region has been witnessing rapid transformation in retail activities on the back of changing market dynamics and rapid economic development. The retail culture has evolved from traditional outlets to large shopping malls, hypermarkets, supermarkets and organized chains, companiesandmarkets.com said in its latest research “Middle East Retail Sector Forecast to 2013.” The report said changing consumer demographics in countries like Saudi Arabia and the UAE, presence of large expatriate population, improving purchasing power and abundance of petro dollar have attracted premium and luxury brands to the region. In 2009, the Middle East retail industry was valued at around $ 418 billion. All the countries did not react in the same way to economic downturn. While some economies like Kuwait slumped, others such as Qatar thrived due to high demand for its gas. We anticipate that the Middle East retail industry will grow at a CAGR of around 13 percent during 2009-2013 to more than $675 billion. The report has identified Saudi Arabia and UAE as the most potential and dynamic retail markets in the region. These two markets have been sustaining their dominance on the retail landscape for more than a decade and will continue to do the same in coming years. The presence of large expatriate population and majority of region´s retail investment in these countries have helped to maintain the growth momentum. UAE represents one of the fastest growing retail industries in entire MENA region that despite economic slowdown, the industry achieved double-digit year on year growth in 2009 and outpaced recessionary effects comfortably, RNCOS said in its latest industry market research titled “Booming Retail Sector in UAE”. The research noted that surging public and private sector consumption along with the contribution of strong industry verticals (tourism, trade, banking, etc.) are expected to further boost the retail sales in the country and industry CAGR for 2010-2013 is anticipated to remain in double-digit bracket. The research further revealed that service sector strongly supports the retail activities in UAE. For example, the tourism industry has boosted retail spending in recent years, and in 2009, the segment emerged as the second largest retail sales channel in the UAE. In the line of billions of dollar worth of tourism infrastructure developments, the country is anticipated to receive 18 million foreign tourists by 2016. These tourists not only bring foreign currency into the country but also make huge contribution to the retail industry by substantially spending in malls and local shops. Meanwhile, many of the leading UAE banks have increased their asset base during the past three months and when all of the banks are taken into consideration the average increase is approximately 3 percent. Analysts however are also estimating that growth patterns are set to remain very slow for the remainder of 2010. The First Gulf Bank was up by almost 6 percent and this was the highest increase recorded for the period. The Emirates National Bank of Dubai was up by just under 3 percent and the National Bank of Abu Dhabi and the Abu Dhabi Commercial Bank were both up by approximately 2 percent on their overall asset portfolio. The United Arab Emirate Central Bank figures at the end of March showed that the assets portfolio of over 52 banks were up by almost 14 billion when compared with the same period for the previous year which calculates an overall growth figure of less than 1 percent for the period. However, analysts said these are poor growth figures overall and it is hoped that by the end of 2010 the regions financial institutions will be showing a more healthy growth pattern of about 10 percent on their asset portfolios. It is also forecast that lending will be cautious and slower than expected this year.
