DUBAI: Retail growth in the Middle East and North Africa will be the highest worldwide in 2013, with oil-rich nations in the region outpacing other local markets, a study has claimed.
The report from research firm Euromonitor International, entitled "Retail in the Middle East and North Africa: A Look into a Polarised Region", forecast growth of more than 5% in the Middle East and North Africa this year, but pointed to a divide between nations exporting oil and those dependent on tourism.
In general, growth will be driven by demand from high-net worth individuals, a continued rise in disposable incomes and the on-going modernisation of the retail landscape, the company said.
The United Arab Emirates is expected to be the main driver of this process, recording an expansion in retail sales almost doubling that of 2012.
Euromonitor's report noted that the country's "vibrant economy" and position as a regional trade and financial centre should shield it from the unrest now affecting much of the wider Arab world.
"It also provides a beacon of stability for retailers who are postponing further development in troubled Egypt and Syria," it added.
A high oil price will also benefit the retail sectors of other oil-producing countries like Saudi Arabia and Algeria. In particular, the report suggested that there would be more retail opportunities for new brands in Algeria, where consumer choice is currently limited.
There are several factors that retailers need to be wary of, however, including the impact of the global downturn on Western European tourism, which has in turn affected the economies of nations such as Tunisia, Morocco and Egypt.
More generally, the report cautioned that consumers in the region have become increasingly price conscious and are also starting to seek out a more modern shopping experience.
By contrast, the large, young population in urban areas which is at ease using social media should be a target for retailers looking to build an online shopping culture, the report suggested.
Data sourced from AME Info; additional content by Warc staff