KUWAIT: The Gulf retail market is expected to be worth $221bn by 2015, as a growing population and higher per capita income push sales up at a rate of 7.9% a year, a new study has said.
According to the the Kuwait Financial Centre (Markaz), retail is one of the fastest growing sectors in the countries comprising the Gulf Co-operation Council (GCC). These include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
Markaz, reported the Gulf Times, divided the market into two distinct categories of consumer, each of which display differing purchase habits.
On the one hand there are the region's nationals, typically a high income, younger demographic, looking to buy luxury and electronics goods. On the other are working expatriates fuelling a demand for consumer goods.
The study also noted that "generous state subsidies, in the form of grants, lead to increased levels of disposable income aiding the retail industry".
The retail landscape has changed dramatically, with traditional souks replaced by modern shopping malls which have attracted international retailers.
But the report argued that this focus on large malls needs to change and that other retail formats should be accommodated, including modern "cash & carry", convenience and discount stores.
Dubai, which has positioned itself as a shopping destination, has been at the forefront of the development of malls, but a saturation point has arrived and fewer new malls are being built, while older ones are being revamped.
"The continued improvement and reinvention of Dubai's older malls is not an option but a necessity in an increasingly competitive market," Craig Plumb of the realtor Jones Lang LaSalle, told Gulf News.
"The essential objective of any mall redevelopment or repositioning should be to improve the tenant mix and therefore increase the turnover and level of retail spending that can be attracted," he added.
For some of Dubai's malls this has meant replacing luxury outlets with more mid-market stores, or bringing in a supermarket like Carrefour, or adding entertainment options like a cinema.
Data sourced from Gulf Times, Gulf News; additional content by Warc staff