GCC countries continue to attract high investment in the retail sector and perform strongly compared to other emerging markets.
The 13th edition of AT Kearney’s Global Retail Development Index (GRDI) highlights that four GCC countries have retained their position in the top 20 list. The UAE topped the region with 5th position in emerging markets. The emirate was trailed by Kuwait (9th), Saudi Arabia (16th) and Oman (17th). Compared to the previous edition, the UAE improved its ranking by two spots on the back of higher retail sales and per-capita consumer spending, rising consumer confidence, population increase and popularity as the hub of regional tourism.
Although the Dubai market is saturated with global brands, consumer demand has continued to surge and lead to higher retail sales. The opportunity has attracted even more global brands to the emirate and brought different European and American concepts to the local mall and retail culture. Rising disposable incomes have also fueled consumer interest in luxury retail experience.
According to Dr Martin Fabel, partner and head of Consumer Industry and Retail Practice, AT Kearney Middle East; “The GCC retail sector has witnessed exponential growth in 2012 fuelled by increasing tourist flows and new retail projects. In 2012, Dubai saw the entry of US-based brands Victoria’s Secret, Cheesecake Factory, and IHOP through franchise agreements.”
In the future, Kuwait presents an attractive opportunity for international brands in the region. The country has enjoyed steady economic growth over the past few years, with the outlook expected to remain favorable due to increasing consumer spending. In 2012, international retailers like Cheesecake Factory, Victoria’s Secret and COS entered the market with franchise agreements. Saudi Arabia also offers huge untapped potential as a result of high consumer confidence levels and brand savvy consumers.
The overall charts were led by Brazil for the third consecutive year. Chile retained its second position, while Uruguay was ranked third.