Retailing in the United Arab Emirates

RETAILING IN THE UNITED ARAB EMIRATES Euromonitor International April 2014

RETAILING IN THE UNITED ARAB EMIRATES

LIST OF CONTENTS AND TABLES Executive Summary ..................................................................................................................... 1 Economic Recovery Brings Sales Growth Back on Track at the End of the Review Period ..... 1 Rise in Tourism As Consumer Confidence Picks Up ................................................................ 1 Non-grocery Retailing Grasps Market Trend Opportunities While Grocery Retailing Poses Strong Competition ................................................................................................................... 1 Majid Al Futtaim Hypermarkets Llc Extends Further Lead in the Retailing Market ................... 2 A Healthy Performance Is Expected Over the Forecast Period ................................................ 2 Key Trends and Developments .................................................................................................... 2 Consumer Confidence Picks Up Towards the End of the Review Period ................................. 2 Internet Retailing Another Booming Channel ............................................................................ 5 More Supermarkets and Convenience Stores Emerge As Demand for Convenience Rises .... 7 Growing Shopping Centre Developments Lead To More Retail Sales Area ............................. 9 Market Indicators ........................................................................................................................ 11 Table 1

Employment in Retailing 2008-2013........................................................... 11

Market Data ................................................................................................................................ 12 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11 Table 12 Table 13 Table 14 Table 15 Table 16 Table 17 Table 18 Table 19 Table 20 Table 21 Table 22 Table 23 Table 24 Table 25 Table 26 Table 27 Table 28

Sales in Retailing by Channel: Value 2008-2013 ....................................... 12 Sales in Retailing by Channel: % Value Growth 2008-2013....................... 12 Sales in Store-Based Retailing by Channel: Value 2008-2013 .................. 12 Store-Based Retailing Outlets by Channel: Units 2008-2013 ..................... 12 Sales in Store-Based Retailing by Channel: % Value Growth 20082013 ........................................................................................................... 13 Store-Based Retailing Outlets by Channel: % Unit Growth 2008-2013 ...... 13 Sales in Non-store Retailing by Channel: Value 2008-2013....................... 13 Sales in Non-store Retailing by Channel: % Value Growth 2008-2013 ...... 13 Sales in Retailing by Grocery vs Non-Grocery: 2008-2013 ........................ 14 Non-Grocery Retailers: Value Sales, Outlets and Selling Space 20082013 ........................................................................................................... 14 Sales in Non-Grocery Retailers by Channel: Value 2008-2013 .................. 14 Non-Grocery Retailers Outlets by Channel: Units 2008-2013 .................... 14 Sales in Non-Grocery Retailers by Channel: % Value Growth 20082013 ........................................................................................................... 15 Non-Grocery Retailers Outlets by Channel: % Unit Growth 2008-2013 ..... 15 Retailing Company Shares: % Value 2009-2013 ....................................... 16 Retailing Brand Shares: % Value 2010-2013 ............................................. 16 Store-Based Retailing Company Shares: % Value 2009-2013 .................. 17 Store-Based Retailing Brand Shares: % Value 2010-2013 ........................ 17 Store-Based Retailing Brand Shares: Outlets 2010-2013 .......................... 18 Non-store Retailing Company Shares: % Value 2009-2013....................... 19 Non-store Retailing Brand Shares: % Value 2010-2013 ............................ 19 Non-Grocery Retailers Company Shares: % Value 2009-2013.................. 20 Non-Grocery Retailers Brand Shares: % Value 2010-2013 ....................... 20 Non-Grocery Retailers Brand Shares: Outlets 2010-2013 ......................... 21 Non-Grocery Retailers Brand Shares: Selling Space 2010-2013 ............... 21 Forecast Sales in Retailing by Channel: Value 2013-2018 ........................ 22 Forecast Sales in Retailing by Channel: % Value Growth 2013-2018 ........ 22

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Table 29 Table 30 Table 31 Table 32 Table 33 Table 34 Table 35 Table 36 Table 37 Table 38 Table 39

Forecast Sales in Store-Based Retailing by Channel: Value 20132018 ........................................................................................................... 22 Forecast Store-Based Retailing Outlets by Channel: Units 2013-2018 ...... 23 Forecast Sales in Store-Based Retailing by Channel: % Value Growth 2013-2018 .................................................................................................. 23 Forecast Store-Based Retailing Outlets by Channel: % Unit Growth 2013-2018 .................................................................................................. 23 Forecast Sales in Non-store Retailing by Channel: Value 2013-2018 ........ 23 Forecast Sales in Non-store Retailing by Channel: % Value Growth 2013-2018 .................................................................................................. 24 Non-Grocery Retailers Forecasts: Value Sales, Outlets and Selling Space 2013-2018 ....................................................................................... 24 Forecast Sales in Non-Grocery Retailers by Channel: Value 20132018 ........................................................................................................... 24 Forecast Non-Grocery Retailers Outlets by Channel: Units 2013-2018 ..... 25 Forecast Sales in Non-Grocery Retailers by Channel: % Value Growth 2013-2018 ..................................................................................... 25 Forecast Non-Grocery Retailers Outlets by Channel: % Unit Growth 2013-2018 .................................................................................................. 26

Appendix .................................................................................................................................... 26 Operating Environment ........................................................................................................... 26 Summary 1 Table 40

Standard Opening Hours by Channel Type 2013....................................... 27 Number of Shopping Centres 2010-2013 ................................................... 28

Cash and Carry....................................................................................................................... 29 Definitions................................................................................................................................... 30 Sources ...................................................................................................................................... 31 Summary 2

Research Sources ...................................................................................... 31

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RETAILING IN THE UNITED ARAB EMIRATES EXECUTIVE SUMMARY Economic Recovery Brings Sales Growth Back on Track at the End of the Review Period Following the economic downturn, the retailing performance recuperated towards the end of the review period from 2011 onwards. This was mainly linked to economic instability in Europe and other Middle Eastern countries, leading to more expatriates entering the United Arab Emirates, which resulted in real GDP growing by 3% in 2013, and had been mainly picking up since 2011. Consumers were more cautious of spending during the economic downturn, which picked up towards the end of the review period as disposable incomes rose, making consumers more confident to spend.

Rise in Tourism As Consumer Confidence Picks Up In 2013, retailing sales did not only benefit from domestic consumption but through tourism. This was reflected as tourism flows inbound grew by 9% in 2013, as economic instability and political unrest in other Middle Eastern countries and Europe encouraged more expatriates to visit the United Arab Emirates towards the end of the review period. The touristic consumer base grew as more Russian as well as Chinese tourists with high disposable incomes were encouraged to come into the United Arab Emirates. The tourism industry further boomed from government efforts through maintaining a wide number of tourist attractions and strong infrastructure in the country, encouraging more tourists to perceive the United Arab Emirates as a hub for tourism.

Non-grocery Retailing Grasps Market Trend Opportunities While Grocery Retailing Poses Strong Competition Non-grocery retailing saw a significantly better performance than grocery retailing in 2013 with a 57% current value share. Grocery retailing had a 43% current value share in 2013. Nongrocery retailing mainly benefits from domestic consumer confidence, as expatriates are encouraged to spend more, as well as from a high rise in tourists entering the country who mainly consume beauty and personal care products, apparel and electronics and appliances. Other healthcare specialist retailers as well as chemists/pharmacies benefited from consumers becoming more aware of healthcare products, such as dietary supplements and weight loss products, as they grew concerned for their health with the growth in obesity and diabetes in the country. Grocery retailing, on the other hand, was constrained by governmental price controls protecting consumers from inflation of imported food staples, which limited its retail value sales growth. Also, the number of independent small grocers declined in 2013 by 4% as they could not abide by governmental regulations, forcing them to close down. They also could not survive with the growing competition from modern grocery retailers such as supermarkets. Hypermarkets also posed competition for non-grocery retailing with their wide offering of affordably priced non-grocery products, which mainly grew with the increasing number of Asian workers towards the end of the review period.

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Majid Al Futtaim Hypermarkets Llc Extends Further Lead in the Retailing Market During the review period, many grocery retailers struggled due to the price controls set by the government on certain food staples to protect consumers from inflation. Leading players in retail were mainly represented by local franchises operating international brands and domestic grocery retailers. Majid Al Futtaim Hypermarkets LLC led the retailing industry in 2013 with its well-known brands Carrefour benefiting mainly from their strong international reputations as well as wide distribution presence in the country. Domestic companies such as Union Co-operative Society and Emke Group with its Lulu Hypermarket benefited from offering affordable prices and customised product ranges suitable to meeting local demand.

A Healthy Performance Is Expected Over the Forecast Period Retailing will continue to benefit from the positive economic outlook during the forecast period. Consumer confidence will be boosted as a result of the economic stability, leading to more spending, higher employment and an increase in the number of expatriates and tourists. Growth is also expected to be supported by increased foreign direct investment from Russian and Chinese companies trying to make money through foreign investments, as well as further realestate project investments and growth in the number of upcoming shopping centres in Abu Dhabi and Dubai, which are due to be completed over the forecast period, increasing the number of retail outlets. Also, non-grocery retailing is expected to see higher growth than grocery retailing as the affluent population increases, and tourists contribute to a higher percentage of consumption during the forecast period.

KEY TRENDS AND DEVELOPMENTS Consumer Confidence Picks Up Towards the End of the Review Period At the beginning of the review period, the United Arab Emirates was affected by the economic downturn, which began in 2009 with annual disposable income per capita declining by 55% from 2008 to 2009 in real terms, while expenditure on retailing per capita fell by 21% in 2009. The country’s retailing market contributes approximately one third of the country’s GDP, and this was hit hard in the financial crisis as real GDP declined by 5% during 2009, and picked up slightly with 2% real GDP growth in 2010, and continued to pick up by 3% in 2013 at the end of the review period. The economic climate at that time undermined both domestic and tourist expenditure as visitor numbers fell and as consumers had the urge to save rather than spend. Consumers also became more price-sensitive and resorted to more affordable forms of shopping. They spent more time at home rather than in shopping centres, and homeshopping and informal retailing grew during this period as consumers were seeking price promotions and other forms of saving money. Retail shops pulled back on their expansion plans and were also working longer hours, as the number of 24-hour outlets grew during this period to compensate for lost sales. From 2010 onwards the economic situation picked up in the country, mainly driven by more foreign direct investment from Russian and Chinese companies, as well as oil prices rising, employment picking up thereby increasing consumer expenditure and disposable incomes. Real GDP picked up from 2% real GDP growth in 2010 to 3% in 2013. This was also driven by population growth and the increase in the number of tourist arrivals, which was further supported by the government to encourage more footfall in the country. Domestic consumers began to feel more confident to spend on luxury retail items as more outlets opened in 2010 by

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Al Tayer Group such as Gucci and Prada stores. Expatriates who left the country during the economic crisis returned, which also added to growth in 2012 and 2013. Furthermore, the economic performance uplift within retailing and consumer confidence came about through further population growth, while in 2013 almost 89% of the population was made up of foreign citizens in comparison with 83% in 2006. Since then the population has grown rapidly by 105% from 4.1 million to 8.4 million in 2013. Overall, retailing benefited significantly at the end of the review period due to strong population growth as more expatriates returned to the country; political instability the rest of the Middle East helped in increasing their number. This development came alongside growth in tourism with retailing up in current value terms by a 4% CAGR over the review period, mainly contributed by non-grocery retailers with a 5% CAGR in real value terms. Consumers were more confident to purchase rather than window shop given their higher disposable incomes towards the end of the review period. Grocery retailers also improved their performance as they began venturing out into non-food products during the economic downturn, as consumers were seeking more affordable nongrocery items. Furthermore, towards the end of the review period the number of Asian workers increased in the country, which increased the number of grocery retailers offering products such as clothing, footwear, and beauty and personal care products in addition to their grocery product offerings. As a result, consumers spent more time in shopping centres in 2013 as non-grocery retail outlets grew by 3% and grocery retailers outlets grew by 1%, as a result of growing demand and consumer confidence, via expansion plans that were put on hold during the economic downturn. Affluent consumers had more income to spend on non-grocery outlets, which saw non-grocery retailer’s increase by 6% in value terms in 2013. This was mainly contributed by beauty and personal care consumption by tourists and domestic consumers. On the other hand, within grocery retailers, supermarkets, convenience stores and food/drink/tobacco specialists grew the most in 2013, with 13% growth seen in supermarket outlets, as consumers demanded more convenient forms of grocery shopping. Furthermore realestate picked up in 2013, which also contributed to the need for more supermarkets within residential areas as well as commercial towers for home delivery and daily consumption. Inflation also boosted value sales in 2013. Governmental price controls had been set strongly during the beginning of the review period on certain food staples to protect consumers from imported costs. These began to loosen in 2013 as the cost of living rose, and consumers spent more of their disposable incomes, which is the main reason for growth in expenditure as the cost of goods sold rose. E-commerce is also going to increase consumer expenditure as consumers are spending more time shopping online, because they become more confident in carrying out online transactions once they trust the merchant. As a result, retailing grew by 6% in 2013. Outlook Over the forecast period, consumer confidence is expected to proceed and contribute to a good economic performance. This will be mainly driven by population growth as a result of political instability working in the United Arab Emirates’ favour. There will be increasing employment opportunities as the economy recovers. More foreign direct investment by Russian and Chinese companies will be seen, benefiting real estate as well as the retailing industry, due to higher levels of tourism. The government is also expected to further expand trade finance services, which will all benefit tourism. Growth in the number of shopping centre developments and tourist attractions will drive more people into the country as well as increase the leisure activity in the country. With the higher population number in Abu Dhabi, more shopping centre developments are likely to proceed there to further develop the shopping experience.

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Furthermore, inflation is likely to push economic value sales more than higher disposable income growth. This trend will be mainly due to oil prices going up and the cost of living rising, which will increase consumer expenditure as the costs of products and services increase, benefiting grocery and non-grocery retail outlets. Real GDP is expected to grow by 4% over the forecast period, and in return the retailing industry is likely to respond by expanding its number of outlets, taking on more franchise partnerships for luxury apparel brands as well as increasing product choice to meet the growing demand as economic security improves. With the better economic conditions in the United Arab Emirates, retailing grew in 2013 by 6%, showing higher growth than the 4% CAGR of the overall review period. This was mainly due to the factors that drove sales up towards the end of the review period, including expatriates returning to the country, an improved job market and a boost in consumer confidence as more foreign investment took place and more tourists visited the country. Furthermore, as the improved economy prevails over the forecast period, consumers will become more confident in spending as constant value sales are set to increase by a 4% CAGR, higher than the 3% CAGR of the review period. Various non-grocery retailers that were restrained from increasing their prices will compensate over the forecast period and benefit from higher consumer expenditure. These include apparel specialist retailers, beauty and personal care specialist retailers, home and garden specialist retailers, and leisure and personal goods specialist retailers as well as optical goods stores, which are all set to see 4-5% constant value CAGRs during the forecast period. On the other hand, there will be a number of constraints that will limit value sales growth over the forecast period despite the strong economic performance expected. With grocery retailers expanding their product ranges within beauty and personal care as well as clothing and footwear, this will pose competition for non-grocery retailers with the crowded retail environment expected over the next five years. Price competition will grow as the retail environment grows and more players come into the market. Further price promotions will place pressure on prices for grocery retailers, making it difficult for them to increase prices to stay in line with inflation. However, Asians of lower-income groups will still benefit grocery channels with non-food products as such goods will still be more affordable than in non-grocery retailers. Higher-income groups will still consume from nongrocery retailers and seek value for money as more brands and product choices come into the market. Internet retailing is expected to grow by a constant value CAGR of 14% over the forecast period, a higher rate than grocery retailers, mainly due to its small consumer base. However, as consumer confidence remains and secure payment systems online prevail, with PayPal being one of the main ones, consumers are likely to seek more convenient forms of shopping by the click of a button as the retail environment gets crowded over the forecast period. Also, electronic appliances are expected to be the main contributor for multichannel grocery retailers such as Carrefour, Géant and Lulu Hypermarket competing with cheaper online prices against nongrocery electronics and appliance specialist retailers. Despite this, internet retailing is expected to form 3% of constant value sales of retailing in 2018, and grocery retailers is still expected to dominate the market. Furthermore, grocery retailers will still be popular for food product items as consumers seek freshness; as well as this, growth in supermarkets will appease the convenience trend with home delivery. Furthermore, most grocery retail hypermarkets and supermarkets that do not have internet retailing are expected to introduce online retail portals focused on non-grocery items rather than grocery items.

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Internet Retailing Another Booming Channel Internet user penetration was at 73% of the population in 2013 in the United Arab Emirates. It is majorly used by consumers at work and at home on the weekends to browse different websites. Internet usage grew rapidly during the economic downturn in 2009, when consumers were spending less time in shopping centres, and instead browsing the internet for offers and better deals as they were price-sensitive during this time. A survey mentioned that 67% of users online make technology-related searches while 48% make travel-related searches on the Google search engine. Furthermore, e-mail, social networks and online videos are the most popular online activities with more than 80% of users dealing with these every day, a survey revealed. Meanwhile, the number of the country’s citizens who use the internet to perform financial transactions is still below the world average; however, the number of people shopping online is growing steadily. Currently, 46% of the country’s users make online purchases every day, and 45% used online banking systems in 2013. The country also has the fastest broadband service of all Middle Eastern countries according to industry reports. The average internet connection in the country is 3.92 megabits per second, more than double the rate of most countries in the region. Furthermore, during the downturn, the increased usage of internet retailing helped push companies to engage in online advertising, social media and online platforms such as Facebook and Twitter to reach consumers, as consumers spent more time online and window shopping to browse for good offerings. Despite this growth, search advertising in the United Arab Emirates is still minimal at 20% in comparison with 55-60% in London, as this is still a niche form of advertising in the country, but is becoming a very important one. In addition, as consumers became more sophisticated and confident that online orders offer quality products, prompt home delivery and credit card security, the number of online users grew towards the end of the review period. The growing usage of credit cards with benefits promoted by banks increased the number of electronic transactions by 13% in 2013 as consumers became more comfortable buying online. There is also a website that was recently launched in the United Arab Emirates in June 2013 called Bkam.com by Jabbar Internet group, one of the region’s largest online investors. This site provides consumers more information on products including prices, reviews and retail locations. It offers a range of products such as consumer electronics, cosmetics, clothes and accessories sourced from both online fashion brands, such as Carrefour as well as H&M and Zara, and ecommerce sites, such as Souq.com, namshi (PP) and Jadopado.com. The growing number of online users drove the launch of this website, which benefits consumers by helping them make better choices when shopping for products, through promoting these well-established sites and showing them the best value for money, as well as attracting retailers that are not well known. The site is also looking to expand and include food and beverage offerings soon. Another element that continues to support internet retailing is mobile internet retailing. Smartphones started with consumers wanting to interact socially, and then by the end of the review period it shifted to the need for consumers to be politically active through Facebook and tweeting. The United Arab Emirates tops the list for the most Facebook users as a percentage of the population according to an Arab Social Media report in 2013. Mobile internet retailing is mainly used by the youth population in the country. In addition, schoolchildren are also heavy internet and game users as there are limited outdoor social activities due to the hot weather conditions. Leading telecom providers such as DU and Etisalat have also introduced 4G LTE mobile broadband devices to improve the internet experience for consumers, taking advantage of the growing demand for internet usage. Internet retailing is also growing in popularity as consumers are becoming more tech-savvy and confident in purchasing online with safe payment methods such as PayPal. PayPal’s

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popularity has also benefited internet retailing growth. With new entrants expected in the market, PayPal anticipates signing up 25,000 merchants and capturing 10% of the MENA region’s e-commerce customers in the next two years. Despite the high popularity of browsing the internet in the United Arab Emirates, internet retailing only accounted for a 2% value share of overall retailing in 2013. This is mainly because consumers still like to touch and feel the products they are buying, in addition to the shopping leisure activity culture being very popular in the United Arab Emirates. Consumers mainly use the internet to gather information on products, and this has had an impact on retailing as consumers use this channel to check prices and promotions, and compare products with storebased products. In response to the growing internet usage, store-based retailers have ventured into increasing their online presence. A few players such as Carrefour by Majid Al Futtaim Hypermarkets LLC launched into internet retailing in 2011; Géant by Fu-Com International and Lulu Hypermarket by Emke Group offered it in 2013. These latest online stores for grocery retailers in the United Arab Emirates mainly focus on non-grocery items such as consumer electronics and beauty and personal care. Even if some players did not get involved in the multichannel development, the majority had Facebook and Twitter accounts by the end of the review period to create dialogue with consumers. The leading players in 2013 meanwhile were pure e-commerce players such as Jabbar Internet Group FZ LLC with its leading site Souq.com (PP) contributing to the company’s value share of 14%, followed by Amazon.com Inc with 9% and Majid Al Futtaim Hypermarkets LLC with IC4UAE (MC) with 7%, all of which proving highly successful in that competitors entering in 2013 such as Lulu Hypermarket and Géant focused on similar product offerings. Al-Futtaim Group LLC and Landmark Group also established presence in internet retailing by the end of the review period. Internet retailing has helped grocery retailers venture out further into nongrocery products in response to the strong competition in the crowded retail environment, as well as to the growing online demand. Consequently, internet retailing gained further importance with value sales rising by 20% in 2013. Outlook The United Arab Emirates is on its way to becoming one of the most technologically advanced nations in the world by 2021. The government is committed to continue promoting technology in the country through in-home entertainment as well as outdoor entertainment. To contribute to growth of internet retailing, telecom services are expected to continue improving their broadband services to encourage faster speed transactions, while expatriates continue to spend more time online through their social networks are expected to become more aware of new product launches, encouraging further online transactions. Consumers are becoming more educated about technology as they are enjoying the popularity of tablet PCs and smartphones. Smartphones are not just becoming a platform for social networking but also a more convenient means of purchasing and making transactions via a mobile. By 2016, mobile internet retailing is expected to contribute to 1% of purchase transactions as more affordable mobile phone handsets are released in the United Arab Emirates, and as consumers become more aware of the latest product offerings. Consumer confidence will also continue to prevail as internet retailers continue to build trust with consumers via prompt home delivery, secure online payment methods as well as wide product choices with exclusive promotions. Telecom operators are expected to introduce near-field communication wireless technology to transfer data through radio frequency identification transponders, through, for example smartphones for contactless payments. This will be in response to the growing penetration of mobile internet retailing.

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Over the forecast period, internet retailing is expected to record a better performance with a constant value CAGR of 14%, in comparison with the constant value CAGR of 10% over the review period. More consumers coming back to the United Arab Emirates will contribute to this; also, not only are consumers spending more time online be it on their PC at home or at work, smartphone or PC tablet, but they are also becoming very tech-savvy in the sense that they are more accustomed to making online transactions to fit with the more convenient lifestyle that they seek. In addition, the widespread use of smartphones is likely to lead to the growth of online purchases. According to industry sources, 37% use their mobile devices to make online transactions in the United Arab Emirates. Also, the business use of smartphones will increase this further over the forecast period. This will be complemented by more consumers being expected to use credit cards online, as electronic payments are anticipated to grow by 8% in 2018 as people feel more secure in making online transactions. While internet penetration value sales are low in the region, internet banking and mobile banking are expected to continue to rise. The government has supported this with the launch of the ‘mobile government initiative’ in the United Arab Emirates in May 2013 as an application for greater convenience and ease of access. This will increase the number of consumer transactions via mobile devices. As consumers continue to be more fashion-conscious, apparel internet retailing is expected to contribute the highest growth. Consumers are expected to become more confident of their clothes and footwear sizes, making it easier for them to shop for these products online. Also, with the free return policy on most internet sites that have opened in the region, such as Namshi.com and Markavip.com, consumers will be willing to take a risk on purchasing online, as they can return if their products do not meet their size, for example. Furthermore, a growing number of store-based retailers are expected to enter the online channel. As consumers browse the internet and shop online, store-based retailers are likely to implement online channels to help boost their products via promotions. Lulu webstore and Géant were launched in 2013, focusing on non-grocery products such as consumer electronics and video games, as consumers compare products and prices in this category online the most. The region’s first e-shopping centre, named Tejuri.com, was launched in March 2013 as a way for retailers to expand beyond their traditional customer base, as well as to promote retailers that are not known in addition to the well-established ones. There are options to shop by brand and shop by store, giving store-based retailers, such as Al Jaber Optical and Grand Optics, a presence online without having their own online portal, making it easier for consumers to compare against other stores, and convenient as they are all under one online portal.

More Supermarkets and Convenience Stores Emerge As Demand for Convenience Rises Consumers in the United Arab Emirates over the review period sought more convenient channels of shopping, because of the crowded retail environment, busier lifestyles and population growth towards the end of the review period. After the economic downturn during the review period, the real-estate industry began to pick up as property prices boomed, and rents went up towards the end of this period. Through this, more consumers began demanding supermarkets and forecourt retailers in residential as well as commercial areas. Consumers have begun to adapt their shopping habits; rather than shopping on a monthly basis, they shop on a weekly basis more regularly. These led dominant players within grocery retail channels introduce more supermarkets and convenience stores over the review period. Convenience retailers became more popular in 2013 as petrol prices rose and various petrol stations shut down. Carrefour market by Majid Al Futtaim Hypermarkets LLC is a supermarket with 1,200 square meter launched in 2013 in Abu Dhabi as consumers demanded more supermarkets

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Géant by Fu-Com International opened its latest supermarket in Community Centre in New Jumeirah Park neighbourhood in 2013, and Choithram supermarket opened its 27th outlet in March 2012 in Layan Community. Waitrose also opened two more outlets in Abu Dhabi in 2013 due to the growing demand for home delivery. ADCOOP (Abu Dhabi Cooperative Society) the hypermarket partnered up with Spar International supermarkets in January 2013 to leverage the opportunity to enter the Middle East as an international brand, and are looking to develop the SPAR multi-format retail strategy by opening convenience and supermarket outlets. As consumer habits began to evolve, this benefited the retailing industry towards the end of the review period as convenience stores, forecourt retailers and supermarkets saw the highest growth in current value terms. These categories picked up towards the end of the review period as consumers were spending more time making regular shopping trips, and it was more convenient for them to have stores close to residential areas. In 2013, convenience stores saw the highest growth, at 8%, as a result. Despite this, hypermarkets are still the most significant channel in retail value terms, accounting for 52% of overall sales of grocery retailers in 2013, while supermarkets accounted for 21% of grocery retailer’s sales. In addition, strict Food Control Authority regulations were implemented in 2013, and some traditional grocery retailers were forced to shut down as they could not afford to maintain the standard required by the government. These stores were then replaced by supermarkets and convenience stores. This helped boost modern grocery retailers by the end of the review period. Furthermore, convenience stores were the fastest-growing channel at 8% in 2013. This picked up as players such as Emirates National Oil Co (ENOC) with its brand Zoom benefited from developments in metro stations as stand-alone outlets, in addition to their availability in 56 petrol stations across the country. Consumers also visit convenience stores more regularly, and purchase food products as they are filling up on petrol. Furthermore, with shopping centre developments over the review period, and more grocery shopping being done in hypermarkets due to the hot weather climate, outlets of independent small grocers shrank by 4% in 2013. T Choithram & Sons Dubai led supermarkets with a 21% value share, followed by Emke Group with an 18% value share and Spinneys Group Ltd with a 14% value share, in 2013. Choithram has benefited from its new supermarket outlets, which opened at the end of the review period. Lulu has a wide presence and hence this has maintained Emke Group’s position across the country, while Spinneys plays on its freshness factor, following the health and wellness trend. It also sells products that are not available in Carrefour Market or Lulu, and its prices are higher than these supermarkets. Outlook The government as well as grocery retailers is introducing initiatives to help support the emergence of modern grocery retailers in the United Arab Emirates. This has been done already over the review period by the government ensuring that grocery retailers meet quality assurance standards enforced by the Food Control Authority, to ensure that consumers are consuming the best quality of food. This has also introduced opportunities for well-established entrepreneurs to venture out into other channel formats due to their strong presence, benefiting residential neighbourhoods and maintaining the correct quality. This is expected to increase over the forecast period as more forecourt retailers, supermarkets and convenience stores open up to meet the growing demand. Following this trend, it is expected that over the forecast period will increase in number: by an 8% CAGR for convenience stores, a 5% CAGR for supermarkets and a 2% CAGR for forecourt retailers. With the positive economic outlook and population growth expected, retail consolidation is likely to occur to leverage resources as well as meet the growing need for convenient outlets.

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In addition, with higher disposable incomes anticipated as more expatriates influx the country, and expected real GDP growth of 4%, over the forecast period consumers will be more confident in spending, especially in more premium supermarkets such as Choithram, Waitrose and Spinneys. One of the leading hypermarket players, Majid Al Futtaim Hypermarkets LLC, plans to expand by acquiring Abraaj Group’s stake in the Spinneys supermarket chain franchise outside the UAE and expand across the Middle East. Abraaj Group is a private equity firm headquartered in Dubai. As supermarkets will grow in popularity due to their home delivery services and availability among residential areas, especially with the real-estate industry expected to boom over the forecast period, major players will seek to leverage resources to attain the expertise that supermarkets are currently portraying in the market. Convenience stores are also expected to benefit from high footfall in outlets as more expatriates enter the country given the positive economic outlook. Demand for more stand-alone outlets will also benefit convenience stores as they set up in commercial towers. The category will also benefit from the decline in independent small grocers. In the forecast period, supermarkets with benefit from a constant value CAGR of 5% followed by a slightly less constant value CAGRs for forecourt retailers and convenience stores. Supermarkets will emerge as the fastest-growing modern grocery retailers channel in constant value terms, as consumers will demand more outlets, due to the growing need for convenient shopping methods and home delivery among locals. Real-estate development will also increase the need for more supermarkets as family-oriented expatriates move into the outer suburbs.

Growing Shopping Centre Developments Lead To More Retail Sales Area Apart from internet retailing and tourism, the real-estate industry is another focus area that the United Arab Emirates is looking at to continue growing the country’s economy. During the beginning of the review period in 2009 the real-estate market faced one of the hardest hits during the financial downturn, with prices dropping by up to 60%. This then picked up in different stages in 2011 and 2012 after the US$25 billion Dubai world debt rescheduling was signed off. Then property companies such as Nakheel and Emaar Properties continued working on some of the projects that were put on hold, and the whole real-estate market started picking up again. Dubai was ranked as second in the global real-estate property market in 2012, with Hong Kong, China first according to Forbes ranking. House prices shot up by 19% in 2012. In 2013, there was a high rise in home-buying among expatriates as well as investors, leading Dubai to the top of the global ladder. In 2013, there were European expatriates fleeing high taxation, and establishing themselves in Dubai, as well as Chinese people worried about property crashes in their own countries and seeking to invest their money overseas in the United Arab Emirates. A growing number of Arab expatriates moving away from political instability as well as the economic uplift led expatriates back into the United Arab Emirates. A report by Deutsche Bank reports that Dubai real-estate prices and rents witnessed a 16th consecutive monthly increase in March 2013 after the steady recovery with the return in investors’ confidence in Dubai. The recovery that began in 2011 in prime properties is now moving to second-tier communities. In response, property developers are accelerating project launches. An Asteco report states that, in Q1 in 2013, Dubai apartment prices rose by 12% in value and villa prices lagged by 5% rise. On the other hand villa rents were up by 4% compared to an average of 3% rent increase in apartments. The year-on-year rent growth ranged at 19% and 21% for apartments and villas respectively for Dubai in Q1 2013. In Q2 2013, property prices were up by 17% especially in areas such as Discovery Gardens and The Greens. According to Asteco report, apartment sale prices grew by 12% on average in Q2 and villa prices rose by 8%,

© Euromonitor International

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RETAILING IN THE UNITED ARAB EMIRATES

similar to Q1 2013. Overall Dubai property prices rose by 42% in the past year of 2013 and rentals up by 23% due to political stability, trade links, great infrastructure and attractive tax environment. On the other hand Abu Dhabi’s property prices rose by 26% and rents increasing by over 20% over the past year. According to the Deutsche Bank report, property prices in Dubai have seen 6.2% growth in the first three months of 2013. Furthermore, data from Dubai Land Department shows that the value of property transactions in Dubai increased by 63% to AED44 billion in Q1 in 2013 compared with Q1 in 2012. According to real-estate specialist Jones Lang LaSalle, Burj Downtown, Dubai Marina and Palm Jumeirah have seen the highest jumps in rents while more established communities in Central Dubai are expected to see further price and rental growth in 2013. Less complete projects will need more time to witness high price growth. Arabian Ranches in Dubai has seen a rent spike of 25% year-on-year. Furthermore, Abu Dhabi remains 18-24 months behind Dubai and was not expected to experience an upturn in 2013, but will recover in 2014 as a number of infrastructure projects are scheduled to be launched then. The financial crisis in 2008-2009 also affected the retail development market as developers focused more on shopping centre projects, and shifted their focus away from real-estate developments during the review period. In Abu Dhabi a total of 260,000 sq m of retail space was added to the 1.7 million sq m available in 2012, according to property consultancy Jones Lang LaSalle. Hence retail space continued expanding at the end of the review period. Furthermore, non-grocery retailers were growing between 2011 and 2012 as well as in 2013. This was mainly because they were taking advantage of the low rents in smaller shopping centres at the time. Al Tayer Group, a local franchise partner, continued bringing in international brands such as Gucci, Prada and Miu Miu in 2011. Azadea Group also launched its first Middle Eastern store, Asda’s fashion label George, in Abu Dhabi in October 2012. MAF Fashion LLC also opened its first Hollister store in Dubai in 2013, due to the retail market being boosted by different shoppers. It also opened a shopping centre in Fujairah in 2013, which has increased the number of apparel retail outlets under its company name. As a result, outlet number for nongrocery retailers recorded an increase over the review period, at a 3% CAGR. However, as the real-estate market picked up and tourism boomed, retailing space increased, which led to soaring rents in major shopping centres In the United Arab Emirates at the end of the review period. Store rentals in Dubai Mall and Mall of the Emirates and Deira City Centre increased by 15-20% in 2012, squeezing margins and leading some retailers to move to cheaper locations. Géant Hypermarket by Fu-Com International signed a lease to open its store in Dubai Dragon Mart in 2012 as Nakheel extended Dragon Mart phase 2 in the same year, adding 177,000 sq m to the existing shopping centre with the total size becoming 335,000 sq m. Outlook Real-estate developments of shopping centres will continue to prosper over the forecast period in the United Arab Emirates. This will be mainly driven through high tourism, disposable income growth and a more affluent population, leading to more shopping centre developments over the coming period. A new shopping centre was due to open in Al Bahia in Abu Dhabi by the end of 2013. Yas Mall is set to open in 2014. Majid Al Futtaim Hypermarkets LLC is in the process of opening up a shopping centre in Abu Dhabi, of a similar size to Mirdif City Centre. Abu Dhabi is also expected to see an AED1.0 billion mega shopping centre open at Al Maryah Island, near to Saadiyat Island, in 2017. Furthermore, other Emirates are also expected to see shopping centre expansion, such as Dubai. According to industry sources, Nakheel Mall on the Palm is due to be launched in 2016 with 100,000 sq m retail space including five retail levels. Jumeirah Park is expected to get a new Géant-led neighbourhood shopping centre, while Nakheel was looking at doubling the size

© Euromonitor International

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RETAILING IN THE UNITED ARAB EMIRATES

Passport

of Ibn Battuta and expanding Dragon Mart shopping centre in 2013. The world’s biggest shopping centre is in construction in Mohammed Bin Rashid City. The city will be complete in 2020, and will include more than 100 hotels, the world’s biggest shopping centre, golf courses, a hub for arts, centres to develop small businesses, and a park that will be 30% larger than Hyde Park in London and partly developed by Universal Studios; however, no launch date has been given for the shopping centre as of yet. Over the forecast period, with the further development of shopping centres and growing demand, the retail landscape is expected to change further. More international brands will influx the country as already experienced towards the end of the review period. Retailing will increase at a constant value CAGR of 4% over the forecast period, and is expected to be supported by an increase in retail space as well as an increase in the number of outlets, which are predicted to rise at 3% and 2% CAGRs respectively. For example, MAF Fashion LLC is looking to launch US fashion retail brand Abercrombie & Fitch in Dubai from 2014. As a result of predicted growing demand for retail outlets in shopping centres, high rental prices in well-established toptier shopping centres may encourage some players to move to lower-tier ones or newly developed ones where outlet rental prices are still not established. In addition, with the growing number of shopping centres, more convenient formats will open up over the forecast period. Also, as shopping centres will be open near neighbourhoods, convenient formats such as supermarkets for weekly grocery shopping as well as home delivery will grow in number. While hypermarkets’ sales area is expected to increase at a 3% CAGR, supermarkets’ will increase by an 8% CAGR. Supermarkets is also expected to see a 5% CAGR in terms of outlets, in comparison with the 2% CAGR expected for hypermarkets. Waitrose by Fine Fare Food Market LLC was expected to open two more supermarkets in Abu Dhabi in 2013, and Majid Al Futtaim Hypermarkets LLC was also looking at introducing its first convenience outlet in Abu Dhabi in August 2013 and rebranding its supermarket with the relaunch of Carrefour Market. It is also looking at acquiring part of the Spinneys supermarket chain after acquiring a 25% stake in Carrefour in a Middle East joint venture, as it looks to expand its retail business across the region. Consequently, the retail environment will grow dynamically over the forecast period with the growth of shopping centres. International brands will all be driven by the positive economic outlook and stability in the country as the real-estate industry booms. Consumers, both tourists and locals, will have a wider product choice, which will benefit retail sales growth. Despite this, prices are likely to increase, compensating for high rental prices in well-established shopping centres. These shopping centres will face competition with new shopping centres that will open during the forecast period, and hence in Abu Dhabi this competition is likely to restrict outlet rental prices from going up in comparison with Dubai.

MARKET INDICATORS Table 1

Employment in Retailing 2008-2013

Total employment ('000 people) Employment in retailing ('000 people) Employment in retailing (%) (% of total employment)

© Euromonitor International

2008

2009

2010

2011

2012

2013

4,341.9

5,695.6

5,751.7

5,735.7

5,677.3

5,675.4

530.0

510.0

580.0

620.0

689.0

710.0

12.2

9.0

10.1

10.8

12.1

12.5

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RETAILING IN THE UNITED ARAB EMIRATES

Source:

Passport

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews

MARKET DATA Table 2

Sales in Retailing by Channel: Value 2008-2013

AED million, retail value rsp excl sales tax

Store-based Retailing Non-Store Retailing Retailing Source:

Table 3

2008

2009

2010

2011

2012

2013

76,544.3 1,696.2 78,240.5

78,769.0 1,823.4 80,592.4

81,280.1 2,007.2 83,287.3

84,590.3 2,229.9 86,820.2

88,776.8 2,505.6 91,282.4

94,045.2 2,957.1 97,002.3

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Sales in Retailing by Channel: % Value Growth 2008-2013

% current value growth, retail value rsp excl sales tax

Store-based Retailing Non-Store Retailing Retailing Source:

Table 4

2012/13

2008-13 CAGR

2008/13 Total

5.9 18.0 6.3

4.2 11.8 4.4

22.9 74.3 24.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Sales in Store-Based Retailing by Channel: Value 2008-2013

AED million, retail value rsp excl sales tax

Grocery Retailers Non-Grocery Retailers Luxury Retail Store-based Retailing Source:

Table 5

2008

2009

2010

2011

2012

2013

31,136.1 45,408.2 76,544.3

31,631.7 47,137.3 78,769.0

32,352.7 48,927.4 81,280.1

33,495.0 51,095.3 2,344.4 84,590.3

35,156.9 53,619.9 2,607.7 88,776.8

37,029.4 57,015.8 2,992.4 94,045.2

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Store-Based Retailing Outlets by Channel: Units 2008-2013

outlets

Grocery Retailers Non-Grocery Retailers Luxury Retail Store-based Retailing

© Euromonitor International

2008

2009

2010

2011

2012

2013

9,731 10,483 20,214

9,670 10,738 20,408

9,565 11,005 20,570

9,413 11,311 133 20,724

9,405 11,656 148 21,061

9,514 12,039 159 21,553

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Source:

Passport

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 6

Sales in Store-Based Retailing by Channel: % Value Growth 2008-2013

% current value growth, retail value rsp excl sales tax

Grocery Retailers Non-Grocery Retailers Luxury Retail Store-based Retailing Source:

2012/13

2008-13 CAGR

2008/13 Total

5.3 6.3 14.8 5.9

3.5 4.7 4.2

18.9 25.6 22.9

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 7

Store-Based Retailing Outlets by Channel: % Unit Growth 2008-2013

% unit growth

Grocery Retailers Non-Grocery Retailers Luxury Retail Store-based Retailing Source:

2012/13

2008-13 CAGR

2008/13 Total

1.2 3.3 7.4 2.3

-0.5 2.8 1.3

-2.2 14.8 6.6

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 8

Sales in Non-store Retailing by Channel: Value 2008-2013

AED million, retail value rsp excl sales tax

Direct Selling Homeshopping Internet Retailing Vending Non-Store Retailing Source: Note:

2008

2009

2010

2011

2012

2013

364.5 58.0 1,178.0 95.7 1,696.2

383.3 68.7 1,251.2 120.2 1,823.4

423.1 75.6 1,359.1 149.4 2,007.2

473.3 80.6 1,497.6 178.4 2,229.9

540.4 85.8 1,670.5 208.8 2,505.6

612.4 90.2 2,000.2 254.3 2,957.1

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources Vending data captures vending systems installed in public and semi-captive environments only. For further details refer to definitions.

Table 9

Sales in Non-store Retailing by Channel: % Value Growth 2008-2013

% current value growth, retail value rsp excl sales tax

Direct Selling Homeshopping Internet Retailing Vending

© Euromonitor International

2012/13

2008-13 CAGR

2008/13 Total

13.3 5.1 19.7 21.8

10.9 9.2 11.2 21.6

68.0 55.6 69.8 165.8

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RETAILING IN THE UNITED ARAB EMIRATES

Passport

Non-Store Retailing Source: Note:

18.0

11.8

74.3

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources Vending data captures vending systems installed in public and semi-captive environments only. For further details refer to definitions.

Table 10

Sales in Retailing by Grocery vs Non-Grocery: 2008-2013

% retail value rsp excl sales tax

Grocery Non-Grocery Total Source:

Table 11

Table 12

2009

2010

2011

2012

2013

39.0 61.0 100.0

40.0 60.0 100.0

40.0 60.0 100.0

41.0 59.0 100.0

42.3 57.7 100.0

43.4 56.6 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Non-Grocery Retailers: Value Sales, Outlets and Selling Space 2008-2013

Value sales AED million Outlets Selling Space '000 sq m Source:

2008

2008

2009

2010

2011

2012

2013

45,408.2 10,483.0 2,609.1

47,137.3 10,738.0 2,773.6

48,927.4 11,005.0 2,864.1

51,095.3 11,311.0 2,936.3

53,619.9 11,656.0 3,020.5

57,015.8 12,039.0 3,117.5

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Sales in Non-Grocery Retailers by Channel: Value 2008-2013

AED million, retail value rsp excl sales tax

Apparel and Footwear Specialist Retailers Electronics and Appliance Specialist Retailers Health and Beauty Specialist Retailers Home and Garden Specialist Retailers Leisure and Personal Goods Specialist Retailers Mixed Retailers Other Non-Grocery Retailers Non-Grocery Retailers Source:

Table 13

2008

2009

2010

2011

2012

2013

12,357.4

12,620.6

13,025.7

13,589.8

14,337.2

15,453.9

5,106.0

5,321.0

5,587.6

5,891.0

6,232.2

6,601.8

7,100.0

7,365.4

7,713.5

8,123.9

8,586.2

9,122.7

6,483.4

6,746.3

7,029.8

7,340.1

7,662.1

8,193.5

8,176.9

8,547.3

8,801.8

9,122.8

9,505.3

10,041.0

4,521.0 1,663.4

4,773.4 1,763.2

4,944.0 1,824.9

5,140.0 1,887.7

5,370.4 1,926.4

5,626.8 1,976.1

45,408.2

47,137.3

48,927.4

51,095.3

53,619.9

57,015.8

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Non-Grocery Retailers Outlets by Channel: Units 2008-2013

© Euromonitor International

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RETAILING IN THE UNITED ARAB EMIRATES

Passport

outlets

Apparel and Footwear Specialist Retailers Electronics and Appliance Specialist Retailers Health and Beauty Specialist Retailers Home and Garden Specialist Retailers Leisure and Personal Goods Specialist Retailers Mixed Retailers Other Non-Grocery Retailers Non-Grocery Retailers Source:

2008

2009

2010

2011

2012

2013

2,506

2,556

2,633

2,738

2,808

2,907

419

427

439

452

463

476

2,095

2,146

2,187

2,259

2,345

2,431

1,590

1,621

1,640

1,668

1,713

1,764

2,565

2,650

2,745

2,818

2,916

3,008

349 959

359 979

367 994

372 1,004

384 1,027

396 1,057

10,483

10,738

11,005

11,311

11,656

12,039

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 14

Sales in Non-Grocery Retailers by Channel: % Value Growth 2008-2013

% current value growth, retail value rsp excl sales tax

Apparel and Footwear Specialist Retailers Electronics and Appliance Specialist Retailers Health and Beauty Specialist Retailers Home and Garden Specialist Retailers Leisure and Personal Goods Specialist Retailers Mixed Retailers Other Non-Grocery Retailers Non-Grocery Retailers Source:

2012/13

2008-13 CAGR

2008/13 Total

7.8

4.6

25.1

5.9

5.3

29.3

6.2 6.9 5.6

5.1 4.8 4.2

28.5 26.4 22.8

4.8 2.6 6.3

4.5 3.5 4.7

24.5 18.8 25.6

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 15

Non-Grocery Retailers Outlets by Channel: % Unit Growth 2008-2013

% unit growth

Apparel and Footwear Specialist Retailers Electronics and Appliance Specialist Retailers Health and Beauty Specialist Retailers Home and Garden Specialist Retailers Leisure and Personal Goods Specialist Retailers Mixed Retailers Other Non-Grocery Retailers

© Euromonitor International

2012/13

2008-13 CAGR

2008/13 Total

3.5

3.0

16.0

2.8

2.6

13.6

3.7 3.0 3.2

3.0 2.1 3.2

16.0 10.9 17.3

3.1 2.9

2.6 2.0

13.5 10.2

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RETAILING IN THE UNITED ARAB EMIRATES

Passport

Non-Grocery Retailers Source:

3.3

14.8

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 16

Retailing Company Shares: % Value 2009-2013

% retail value rsp excl sales tax Company Majid Al Futtaim Hypermarkets LLC Emke Group Al-Futtaim Group LLC Union Co-operative Society Damas LLC Landmark Group Abu Dhabi Cooperative Society Azadea Group M H Alshaya Co Paris Gallery LLC Sharaf DG LLC T Choithram & Sons Dubai Life Healthcare Group Jumbo Electronics Co LLC Alphamed Group Majid Al Futtaim Fashion LLC Spinneys Group Ltd Al Tayer Group National Trading & Development Est (NTDE) Rivoli Group Others Total Source:

2.8

2009

2010

2011

2012

2013

6.9

7.2

7.4

7.8

7.9

3.9 3.8 3.4

4.3 4.1 3.5

4.8 4.2 4.0

4.9 4.5 4.1

5.0 4.9 4.1

5.2 2.1 1.7

3.7 2.5 1.8

3.7 2.8 2.1

3.8 3.0 2.1

3.9 3.1 2.2

1.3 1.4 1.8 1.2 1.4 1.1 1.1 0.9 0.9

1.5 1.5 1.8 1.3 1.5 1.1 1.1 0.9 0.9

1.7 1.7 1.9 1.5 1.6 1.1 1.1 1.0 1.0

1.9 1.8 1.6 1.6 1.6 1.2 1.2 1.0 1.0

2.0 1.9 1.9 1.8 1.7 1.2 1.2 1.1 1.1

1.0 0.7 0.9

1.0 0.9 0.9

1.0 0.9 0.9

1.0 1.0 0.9

1.1 1.0 1.0

0.9 58.1 100.0

0.9 57.4 100.0

0.9 54.5 100.0

0.9 53.1 100.0

1.0 50.9 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 17

Retailing Brand Shares: % Value 2010-2013

% retail value rsp excl sales tax Brand Company Carrefour Union Co-operative Society Damas IKEA Lulu Hypermarket ADCOOP Paris Gallery Sharaf DG Choithram Life

© Euromonitor International

Majid Al Futtaim Hypermarkets LLC

Damas LLC Al-Futtaim Group LLC Emke Group Abu Dhabi Cooperative Society Paris Gallery LLC Sharaf DG LLC T Choithram & Sons Dubai Life Healthcare Group

2010

2011

2012

2013

6.9

7.1

7.2

7.3

3.5

4.0

4.1

4.1

3.7 2.4 2.2 1.8

3.7 2.5 2.6 2.1

3.8 2.7 2.8 2.1

3.9 3.0 3.0 2.2

1.8 1.3 1.5 1.1

1.9 1.4 1.6 1.1

1.6 1.5 1.6 1.2

1.9 1.8 1.7 1.2

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RETAILING IN THE UNITED ARAB EMIRATES

Jumbo Electronics Bin Sina E-Max Spinneys Home Centre Smoker's Centre Rivoli Jacky's Marina Emirates Cooperative Society Others Total Source:

Table 18

Jumbo Electronics Co LLC Alphamed Group Landmark Group Spinneys Group Ltd Landmark Group National Trading & Development Est (NTDE) Rivoli Group Jacky's Electronics LLC Marina Home Interiors

1.1 1.0 1.0 1.0 0.9 0.9

1.2 1.0 1.1 1.0 0.9 0.9

1.2 1.1 1.1 1.1 1.0 1.0

0.9 0.9 0.6 0.7

0.9 0.9 0.7 0.7

0.9 0.8 0.7 0.8

0.9 0.9 0.8 0.8

65.0 100.0

62.6 100.0

61.9 100.0

60.2 100.0

Store-Based Retailing Company Shares: % Value 2009-2013

Majid Al Futtaim Hypermarkets LLC Emke Group Al-Futtaim Group LLC Union Co-operative Society Damas LLC Landmark Group Abu Dhabi Cooperative Society Azadea Group M H Alshaya Co Paris Gallery LLC Sharaf DG LLC T Choithram & Sons Dubai Life Healthcare Group Jumbo Electronics Co LLC Alphamed Group Majid Al Futtaim Fashion LLC Spinneys Group Ltd Al Tayer Group National Trading & Development Est (NTDE) Rivoli Group Others Total

Table 19

1.1 0.9 0.8 1.0 0.9 0.9

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

% retail value rsp excl sales tax Company

Source:

Passport

2009

2010

2011

2012

2013

7.1

7.4

7.5

7.9

8.0

4.0 3.9 3.5

4.4 4.2 3.6

4.9 4.3 4.1

5.0 4.6 4.2

5.2 5.0 4.2

5.3 2.2 1.8

3.8 2.5 1.9

3.8 2.9 2.2

3.9 3.0 2.2

4.0 3.2 2.3

1.4 1.5 1.8 1.2 1.5 1.1 1.2 0.9 0.9

1.5 1.6 1.9 1.4 1.5 1.1 1.1 0.9 1.0

1.7 1.7 1.9 1.5 1.7 1.2 1.1 1.0 1.0

1.9 1.9 1.7 1.6 1.7 1.2 1.2 1.1 1.0

2.1 2.0 2.0 1.9 1.7 1.3 1.3 1.2 1.1

1.0 0.7 1.0

1.0 0.9 0.9

1.1 1.0 0.9

1.1 1.0 0.9

1.1 1.1 1.0

0.9 57.1 100.0

0.9 56.4 100.0

0.9 53.4 100.0

0.9 51.9 100.0

1.0 49.5 100.0

2012

2013

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Store-Based Retailing Brand Shares: % Value 2010-2013

% retail value rsp excl sales tax Brand Company

© Euromonitor International

2010

2011

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RETAILING IN THE UNITED ARAB EMIRATES

Carrefour

Majid Al Futtaim Hypermarkets LLC

Union Co-operative Society Damas IKEA Lulu Hypermarket ADCOOP Paris Gallery Sharaf DG Choithram Life Jumbo Electronics Bin Sina E-Max Spinneys Home Centre Smoker's Centre Rivoli Jacky's Marina Emirates Cooperative Society Others Total Source:

Damas LLC Al-Futtaim Group LLC Emke Group Abu Dhabi Cooperative Society Paris Gallery LLC Sharaf DG LLC T Choithram & Sons Dubai Life Healthcare Group Jumbo Electronics Co LLC Alphamed Group Landmark Group Spinneys Group Ltd Landmark Group National Trading & Development Est (NTDE) Rivoli Group Jacky's Electronics LLC Marina Home Interiors

Passport

7.1

7.2

7.3

7.3

3.6

4.1

4.2

4.2

3.8 2.5 2.3 1.9

3.8 2.6 2.7 2.2

3.9 2.8 2.9 2.2

4.0 3.1 3.0 2.3

1.9 1.3 1.5 1.1 1.1 0.9 0.8 1.0 0.9 0.9

1.9 1.5 1.7 1.2 1.1 1.0 1.0 1.1 0.9 0.9

1.7 1.6 1.7 1.2 1.2 1.1 1.1 1.1 1.0 0.9

2.0 1.8 1.7 1.3 1.3 1.2 1.1 1.1 1.0 1.0

0.9 0.9 0.6 0.7

0.9 0.9 0.7 0.8

0.9 0.9 0.8 0.8

1.0 0.9 0.8 0.8

64.2 100.0

61.7 100.0

60.9 100.0

59.1 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 20

Store-Based Retailing Brand Shares: Outlets 2010-2013

sites/outlets Brand ADNOC Oasis Damas Emarat / Emarat Plus Life Aster Pharmacy Aldo Zoom Spinneys Rivoli Bin Sina Pierre Cardin Al Maya Supermarket Boots Al Jaber Optical Mothercare Splash Choithram Grand Optics Sun & Sand Smoker's Centre Aqua Mart

© Euromonitor International

Company Abu Dhabi National Oil Co Damas LLC Emarat Misr SAE Life Healthcare Group DM Healthcare LLC Apparel Group Emirates National Oil Co (ENOC) Spinneys Group Ltd Rivoli Group Alphamed Group Paris Group LLC Al Maya Group M H Alshaya Co Bausch & Lomb Inc M H Alshaya Co Landmark Group T Choithram & Sons Dubai Grand Optics LLC Sun & Sand LLC National Trading & Development Est (NTDE) Emirates National Oil Co (ENOC)

2010

2011

2012

2013

138 123 93 58 59 55 18

132 126 94 63 64 56 19

148 131 92 70 69 56 55

150 141 80 70 69 59 56

37 32 43 32 27 28 27 31 25 24 27 22 31

39 35 36 34 28 27 29 32 26 25 28 29 32

40 38 36 36 30 33 31 33 30 27 29 29 28

47 39 37 37 37 35 35 34 33 31 30 29 28

57

58

-

-

18

RETAILING IN THE UNITED ARAB EMIRATES

Mini Mart

Passport

Emirates National Oil Co (ENOC)

Others Total Source:

-

-

19,543 20,570

19,671 20,724

20,020 21,061

20,476 21,553

Non-store Retailing Company Shares: % Value 2009-2013

% retail value rsp excl sales tax Company Jabbar Internet Group FZ LLC Amazon.com Inc Majid Al Futtaim Hypermarkets LLC ellamart.com Trolley Trading Early Bird Catering Services LLC JadoPado Ltd Namshi General Trading LLC Middle East Trading Store LLC Jackson Trading Co Llc Al Hathboor International Avon Net-A-Porter Ltd MarkaVIP Reebonz HK Ltd Maktoob Inc Others Total

Note:

41

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 21

Source:

40

2009

2010

2011

2012

2013

4.3

5.0

10.0

10.2

9.6

4.0 -

4.7 -

5.2 3.8

6.0 4.5

5.8 4.9

1.8 1.0

1.9 1.2

2.1 1.3

2.3 2.3 1.5

1.9 1.7 1.4

-

-

0.5 -

0.6 1.3

1.3 1.2

0.7

0.8

1.0

1.1

1.1

1.2 0.8

1.2 0.8

1.1 0.7

1.1 0.7

1.0 0.6

86.1 100.0

0.5 83.9 100.0

0.6 0.4 73.4 100.0

0.6 0.5 0.4 66.9 100.0

0.5 0.5 0.4 68.3 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources Vending data captures vending systems installed in public and semi-captive environments only. For further details refer to definitions.

Table 22

Non-store Retailing Brand Shares: % Value 2010-2013

% retail value rsp excl sales tax Brand Company Amazon Souq.com Carrefour Sukar Ellamart Trolley Earlybird Jadopado.com

© Euromonitor International

Amazon.com Inc Jabbar Internet Group FZ LLC Majid Al Futtaim Hypermarkets LLC Jabbar Internet Group FZ LLC ellamart.com Trolley Trading Early Bird Catering Services LLC JadoPado Ltd

2010

2011

2012

2013

4.7 5.0

5.2 5.6

6.0 5.5

5.8 5.4

-

3.8

4.5

4.9

-

4.4

4.7

4.2

1.9 1.2

2.1 1.3

2.3 2.3 1.5

1.9 1.7 1.4

-

0.5

0.6

1.3

19

RETAILING IN THE UNITED ARAB EMIRATES

namshi Bebida

Namshi General Trading LLC Middle East Trading Store LLC Jackson Trading Co Llc Al Hathboor International Avon Net-A-Porter Ltd

Dallmayr Kaffee Avon Net-A-Porter MarkaVIP Reebonz Souq.com Others Total Source: Note:

Passport

Reebonz HK Ltd Maktoob Inc

1.0

1.3 1.1

1.2 1.1

1.2 0.8

1.1 0.7

1.1 0.7

1.0 0.6

0.5 83.9 100.0

0.6 0.4 73.4 100.0

0.6 0.5 0.4 66.9 100.0

0.5 0.5 0.4 68.3 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources Vending data captures vending systems installed in public and semi-captive environments only. For further details refer to definitions.

Table 23

Non-Grocery Retailers Company Shares: % Value 2009-2013

% retail value rsp excl sales tax Company Al-Futtaim Group LLC Damas LLC Landmark Group Azadea Group M H Alshaya Co Paris Gallery LLC Sharaf DG LLC Life Healthcare Group Jumbo Electronics Co LLC Alphamed Group Majid Al Futtaim Fashion LLC Al Tayer Group Rivoli Group Jacky's Electronics LLC Marina Home Interiors Apparel Group Jashanmal National Co DM Healthcare LLC Sharaf Retail LLC Emke Group Others Total Source:

0.8

2009

2010

2011

2012

2013

6.6 8.9 3.6 2.3 2.5 3.1 2.1 1.8 1.9 1.5 1.6

6.9 6.3 4.2 2.5 2.6 3.1 2.3 1.9 1.8 1.6 1.6

7.2 6.4 4.8 2.8 2.9 3.2 2.5 2.0 1.9 1.7 1.6

7.7 6.4 5.0 3.2 3.1 2.8 2.7 2.0 2.0 1.8 1.7

8.3 6.6 5.3 3.5 3.3 3.3 3.1 2.1 2.1 1.9 1.8

1.1 1.5 1.5 1.0 1.0 1.4 1.0 0.6 1.2 54.0 100.0

1.5 1.5 1.5 1.0 1.1 1.3 1.1 0.6 1.2 54.2 100.0

1.6 1.6 1.5 1.1 1.1 1.3 1.1 0.9 1.2 51.8 100.0

1.7 1.6 1.4 1.3 1.2 1.3 1.1 1.0 1.1 50.0 100.0

1.8 1.6 1.5 1.4 1.3 1.2 1.2 1.1 1.1 46.6 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 24

Non-Grocery Retailers Brand Shares: % Value 2010-2013

% retail value rsp excl sales tax Brand Company Damas IKEA Paris Gallery Sharaf DG

© Euromonitor International

Damas LLC Al-Futtaim Group LLC Paris Gallery LLC Sharaf DG LLC

2010

2011

2012

2013

6.3 4.1 3.1 2.2

6.4 4.3 3.2 2.4

6.4 4.7 2.8 2.6

6.6 5.1 3.3 3.0

20

RETAILING IN THE UNITED ARAB EMIRATES

Life Jumbo Electronics Bin Sina E-Max Home Centre Rivoli Jacky's Marina Ace Hardware Aster Pharmacy Aldo Forever 21 Jashanmal Splash Debenhams The One

Life Healthcare Group Jumbo Electronics Co LLC Alphamed Group Landmark Group Landmark Group Rivoli Group Jacky's Electronics LLC Marina Home Interiors Al-Futtaim Group LLC DM Healthcare LLC Apparel Group Sharaf Retail LLC Jashanmal National Co Landmark Group M H Alshaya Co One Retail Network Ltd, The

Others Total Source:

2.0 1.9 1.7 1.7 1.5 1.5 1.5 1.1 1.1 1.1 1.0 0.9 1.2 1.0 0.9 0.8

2.0 2.0 1.8 1.8 1.6 1.5 1.4 1.3 1.2 1.1 1.1 1.0 1.2 1.0 1.0 0.9

2.1 2.1 1.9 1.9 1.7 1.6 1.5 1.4 1.2 1.2 1.2 1.1 1.1 1.1 1.0 1.0

64.7 100.0

62.8 100.0

61.7 100.0

59.1 100.0

Non-Grocery Retailers Brand Shares: Outlets 2010-2013

sites/outlets Brand

Company

Damas Life Aster Pharmacy Aldo Rivoli Bin Sina Pierre Cardin Boots Al Jaber Optical Mothercare Splash Grand Optics Sun & Sand Nine West Aldo Accessories Paris Gallery The Body Shop Arabian Oud Yateem Optician Max Others Total

Table 26

1.9 1.8 1.6 1.3 1.5 1.5 1.5 1.0 1.1 1.1 1.0 0.6 1.2 0.9 0.8 0.7

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 25

Source:

Passport

Damas LLC Life Healthcare Group DM Healthcare LLC Apparel Group Rivoli Group Alphamed Group Paris Group LLC M H Alshaya Co Bausch & Lomb Inc M H Alshaya Co Landmark Group Grand Optics LLC Sun & Sand LLC Apparel Group Apparel Group Paris Gallery LLC Cosmetics Trading LLC Arabian Oud Co Yateem Group, The Landmark Group

2010

2011

2012

2013

123 58 59 55 32 43 32 28 27 31 25 27 22 22 22 27 18 22 19 14 10,299 11,005

126 63 64 56 35 36 34 27 29 32 26 28 29 25 24 26 18 24 21 13 10,575 11,311

131 70 69 56 38 36 36 33 31 33 30 29 29 26 26 17 25 24 23 10 10,884 11,656

141 70 69 59 39 37 37 35 35 34 33 30 29 28 28 26 25 24 24 23 11,213 12,039

2012

2013

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Non-Grocery Retailers Brand Shares: Selling Space 2010-2013

surface area '000 sq m Brand

© Euromonitor International

Company

2010

2011

21

RETAILING IN THE UNITED ARAB EMIRATES

Pan Emirates IKEA Splash Sharaf DG Marks & Spencer Home Centre Debenhams Max Boots Sun & Sand Woolworths Ace Hardware E-Max Homes r Us BHS Toys "R" Us Bloomingdales Next The One

Al-Futtaim Group LLC Landmark Group Sharaf DG LLC Al-Futtaim Group LLC Landmark Group M H Alshaya Co Landmark Group M H Alshaya Co Sun & Sand LLC Sharaf DG LLC Al-Futtaim Group LLC Landmark Group Lals Group Al Maya Group Al-Futtaim Group LLC Al Tayer Group M H Alshaya Co One Retail Network Ltd, The Sharaf Retail LLC

Forever 21 Others Total Source:

Table 27

Passport

32.5 30.0 39.0 33.4 36.6 46.5 36.0 33.6 24.5 21.3 31.3 15.8 17.2 15.3 9.0 14.5 18.5 16.6 18.9

32.5 52.0 41.4 36.7 37.8 46.5 37.9 31.9 25.6 27.1 27.0 15.8 23.0 15.3 9.0 16.9 18.5 16.6 18.9

81.2 52.0 47.9 48.9 44.4 42.3 37.9 24.5 27.1 27.0 27.0 19.7 23.0 18.7 14.0 16.9 18.5 16.6 17.3

101.2 52.0 51.4 49.5 44.4 42.3 37.9 29.4 27.9 27.0 27.0 25.5 23.5 20.5 20.0 19.0 18.5 18.2 17.2

14.7 2,358.9 2,864.1

16.0 2,389.9 2,936.3

16.0 2,399.6 3,020.5

16.5 2,448.7 3,117.5

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Forecast Sales in Retailing by Channel: Value 2013-2018

AED million, retail value rsp excl sales tax

Store-based Retailing Non-Store Retailing Retailing Source: Note:

Table 28

2013

2014

2015

2016

2017

2018

94,045.2 2,957.1 97,002.3

98,810.5 3,381.7 102,192.2

103,086.6 3,818.0 106,904.7

106,896.9 4,250.4 111,147.3

110,663.5 4,778.4 115,441.9

114,338.6 5,397.2 119,735.7

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Forecast value data in constant terms

Forecast Sales in Retailing by Channel: % Value Growth 2013-2018

% constant value growth, retail value rsp excl sales tax

Store-based Retailing Non-Store Retailing Retailing Source:

Table 29

2013-18 CAGR

2013/18 TOTAL

4.0 12.8 4.3

21.6 82.5 23.4

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Forecast Sales in Store-Based Retailing by Channel: Value 2013-2018

AED million, retail value rsp excl sales tax

© Euromonitor International

22

RETAILING IN THE UNITED ARAB EMIRATES

Grocery Retailers Non-Grocery Retailers Luxury Retail Store-based Retailing Source: Note:

Passport

2013

2014

2015

2016

2017

2018

37,029.4 57,015.8 2,992.4 94,045.2

39,080.8 59,729.7 98,810.5

40,786.4 62,300.2 103,086.6

42,160.9 64,736.0 106,896.9

43,487.0 67,176.5 110,663.5

44,799.1 69,539.5 114,338.6

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Forecast value data in constant terms

Table 30

Forecast Store-Based Retailing Outlets by Channel: Units 2013-2018

outlets

Grocery Retailers Non-Grocery Retailers Luxury Retail Store-based Retailing Source:

2013

2014

2015

2016

2017

2018

9,514 12,039 159 21,553

9,676 12,399 22,075

9,923 12,764 22,687

10,117 13,133 23,250

10,298 13,423 23,721

10,506 13,689 24,195

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 31

Forecast Sales in Store-Based Retailing by Channel: % Value Growth 20132018

% constant value growth, retail value rsp excl sales tax 2013-18 CAGR

2013/18 TOTAL

3.9 4.1 4.0

21.0 22.0 21.6

Grocery Retailers Non-Grocery Retailers Luxury Retail Store-based Retailing Source:

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 32

Forecast Store-Based Retailing Outlets by Channel: % Unit Growth 20132018

% unit growth

Grocery Retailers Non-Grocery Retailers Luxury Retail Store-based Retailing Source:

Table 33

2017/18

2013-18 CAGR

2013/18 Total

2.0 2.0 2.0

2.0 2.6 2.3

10.4 13.7 12.3

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Forecast Sales in Non-store Retailing by Channel: Value 2013-2018

AED million, retail value rsp excl sales tax

© Euromonitor International

23

RETAILING IN THE UNITED ARAB EMIRATES

Direct Selling Homeshopping Internet Retailing Vending Non-Store Retailing Source: Note 1: Note 2:

Table 34

Passport

2013

2014

2015

2016

2017

2018

612.4 90.2 2,000.2 254.3 2,957.1

707.1 94.3 2,269.0 311.3 3,381.7

800.6 97.6 2,576.9 343.0 3,818.0

862.0 100.5 2,917.0 370.9 4,250.4

923.3 102.7 3,358.6 393.8 4,778.4

976.4 105.0 3,904.1 411.7 5,397.2

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Vending data captures vending systems installed in public and semi-captive environments only. For further details refer to definitions Forecast value data in constant terms

Forecast Sales in Non-store Retailing by Channel: % Value Growth 20132018

% constant value growth, retail value rsp excl sales tax 2013-18 CAGR

2013/18 TOTAL

9.8 3.1 14.3 10.1 12.8

59.4 16.4 95.2 61.9 82.5

Direct Selling Homeshopping Internet Retailing Vending Non-Store Retailing Source: Note:

Table 35

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Vending data captures vending systems installed in public and semi-captive environments only. For further details refer to definitions

Non-Grocery Retailers Forecasts: Value Sales, Outlets and Selling Space 2013-2018

Value sales AED million Outlets Selling Space '000 sq m Source: Note:

Table 36

2013

2014

2015

2016

2017

2018

57,015.8 12,039.0 3,117.5

59,729.7 12,399.0 3,211.5

62,300.2 12,764.0 3,304.4

64,736.0 13,133.0 3,396.6

67,176.5 13,423.0 3,482.4

69,539.5 13,689.0 3,557.1

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources Forecast value data in constant terms

Forecast Sales in Non-Grocery Retailers by Channel: Value 2013-2018

AED million, retail value rsp excl sales tax

Apparel and Footwear Specialist Retailers Electronics and Appliance Specialist Retailers Health and Beauty Specialist Retailers Home and Garden

© Euromonitor International

2013

2014

2015

2016

2017

2018

15,453.9

16,300.0

17,090.9

17,809.4

18,503.9

19,186.6

6,601.8

6,912.7

7,154.6

7,360.0

7,556.5

7,709.1

9,122.7

9,535.5

9,899.1

10,202.2

10,492.8

10,761.4

8,193.5

8,631.9

9,024.1

9,351.5

9,674.5

9,974.1

24

RETAILING IN THE UNITED ARAB EMIRATES

Specialist Retailers Leisure and Personal Goods Specialist Retailers Mixed Retailers Other Non-Grocery Retailers Non-Grocery Retailers Source: Note:

Table 37

Passport

10,041.0

10,516.1

11,023.3

11,565.2

12,140.6

12,731.0

5,626.8 1,976.1

5,816.0 2,017.5

6,094.3 2,013.8

6,409.5 2,038.1

6,739.2 2,068.9

7,079.5 2,097.7

57,015.8

59,729.7

62,300.2

64,736.0

67,176.5

69,539.5

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Forecast value data in constant terms

Forecast Non-Grocery Retailers Outlets by Channel: Units 2013-2018

outlets

Apparel and Footwear Specialist Retailers Electronics and Appliance Specialist Retailers Health and Beauty Specialist Retailers Home and Garden Specialist Retailers Leisure and Personal Goods Specialist Retailers Mixed Retailers Other Non-Grocery Retailers Non-Grocery Retailers Source:

Table 38

2013

2014

2015

2016

2017

2018

2,907

3,013

3,137

3,287

3,405

3,513

476

493

504

514

521

529

2,431

2,515

2,610

2,699

2,762

2,829

1,764

1,805

1,842

1,874

1,903

1,927

3,008

3,087

3,154

3,217

3,271

3,314

396 1,057

406 1,080

416 1,101

425 1,117

431 1,130

436 1,141

12,039

12,399

12,764

13,133

13,423

13,689

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Forecast Sales in Non-Grocery Retailers by Channel: % Value Growth 20132018

% constant value growth, retail value rsp excl sales tax

Apparel and Footwear Specialist Retailers Electronics and Appliance Specialist Retailers Health and Beauty Specialist Retailers Home and Garden Specialist Retailers Leisure and Personal Goods Specialist Retailers Mixed Retailers Other Non-Grocery Retailers Non-Grocery Retailers Source:

2013-18 CAGR

2013/18 TOTAL

4.4 3.1 3.4 4.0 4.9 4.7 1.2 4.1

24.2 16.8 18.0 21.7 26.8 25.8 6.2 22.0

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

© Euromonitor International

25

RETAILING IN THE UNITED ARAB EMIRATES

Table 39

Passport

Forecast Non-Grocery Retailers Outlets by Channel: % Unit Growth 20132018

% unit growth

Apparel and Footwear Specialist Retailers Electronics and Appliance Specialist Retailers Health and Beauty Specialist Retailers Home and Garden Specialist Retailers Leisure and Personal Goods Specialist Retailers Mixed Retailers Other Non-Grocery Retailers Non-Grocery Retailers Source:

2017/18

2013-18 CAGR

2013/18 Total

3.2

3.9

20.8

1.5

2.1

11.1

2.4 1.3 1.3

3.1 1.8 2.0

16.4 9.2 10.2

1.2 1.0 2.0

1.9 1.5 2.6

10.1 7.9 13.7

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

APPENDIX Operating Environment Informal retailing  Informal retailing is insignificant in the United Arab Emirates in comparison with other countries in the Middle East. The number of businesses engaged is minimal mainly due to the more restrictive government approach with regular check-ups on many areas that are known for informal retailing, mainly in lower-class neighbourhoods.  Consumers in the United Arab Emirates are very fashion-conscious and brand-conscious and hence the informal retailing market is insignificant among the mid-upper-income groups. However, informal retailing is seen to be the strongest among low-income areas, which still exist in parts of Old Dubai such as Al Karama, which is known to sell imitation products, usually of brands. Other areas such as Naif Old Souk and Dragon Mart are also big trading centres for Chinese products as well as bargains.  There is no official data available for informal retailing; however, trade press estimated a value of AED23.0 billion in 2009. This channel saw the strongest growth following the economic crisis in 2009. During this time there was high unemployment, with many workers beginning to perform informal retailing to help maintain their income. This trend was mainly popular in the Northern Emirates of the country as well as for workers in the construction industry where unemployment was the highest as the real-estate industry dropped tremendously. Furthermore, consumers were saving up more and seeking more bargains on luxurious products as they became more price-sensitive during this time.  Informal retailing consumers are mainly from low-income groups, and were often workers from India and East Asia at the start of the review period, as it was seen to be a source of income for them. They are also located in low-income-group neighbourhoods, where the products’ affordability makes informal retailing popular. Furthermore, during the review period a growing number of mid-income consumers began to buy imitation designer clothing and bags from informal channels, as these markets became popular among this group during the crisis.

© Euromonitor International

26

RETAILING IN THE UNITED ARAB EMIRATES

Passport

 Informal channels are strong in particular product areas. These include some of the following: designer bags, footwear, clothing, tobacco products, beauty and personal care and packaged food. They are also strong in selling pirated DVDs, usually delivered directly to consumers’ homes at a quarter of the price of a legally sold DVD. Thus these channels have posed strong competition to grocery retailers and health and beauty specialist retailers as well as media products stores over the review period as consumers resort to the easier option, such as pirated DVDs, especially if they are delivered to their door.  Furthermore, luxury brands are also hit hard from counterfeits on offer in informal retailing, including department stores, apparel specialist retailers and jewellery and watch specialist retailers. Informal channels offer a wide range of premium brands including bags, luggage, jewellery and watches. These are priced 20-30% less than what they are priced in-store by luxury specialist retailers. Most of these purchases take place in apartments, as street hawkers direct consumers to a private apartment to view a range of products on offer. Opening hours Summary 1 Channel

Standard Opening Hours by Channel Type 2013 24 hour present? Saturday-Friday

Public holidays

Supermarkets

Yes

09.00-24.00

Open (limited hours)

Hypermarkets

No

09.00-24.00

Open (limited hours)

Forecourt retailers

Yes

08.00-22.00

Open

Convenience stores

Yes

08.00-22.00

Open (limited hours)

Non-grocery retailers

No (only during Eid Al Fitr)

10.00-22.00

Open

Source:

Euromonitor International

 The standard daily grocery retail opening hours in the United Arab Emirates are 9.00-24.00hrs from Saturday to Friday and for non-grocery retailers during the week they usually open from 10.00-22:00. However, over the weekend non-grocery retailers stay open later until mid-night. During festive times, such as Eid Al Adha and Eid Al Fitr, retail stores in shopping malls can open 24 hours for some of the larger malls during that time. There are also no restrictions on the number of opening days for retail outlets per year.  Opening hours however differ for different stores, for example hypermarkets such as Majid Al Futtaim’s Carrefour, Emke Group’s Lulu Hypermarket and Fu-Com International’s Géant open 9.00-24.00hrs on weekdays and can extend to 01.00hrs on weekends. These grocery retailers sell international brands, while grocery retailers that sell domestic brands such as Abu Dhabi Cooperative Society’s ADCOOP open from 8:00-24.00 Midnight seven days a week.  During shopping festivals such as the Dubai Summer Festival and Dubai Shopping Surprises, shopping centres are open for longer hours, in Dubai and Abu Dhabi mainly. The Dubai Shopping Festival runs from January 2nd to February 2nd. Furthermore, Dubai Summer Surprises runs from 7th of June to 7th of July. During this time non-grocery retail outlets are usually open until mid-night.  Furthermore, some other outlets offer 24-hour opening times such as some supermarkets in residential areas, convenience stores, independent small grocers and chemists/pharmacies. Many forecourt retailers also remain open 24 hours. 24-hour openings are more common in urban areas and less common in rural areas. This is because urban areas are busier and have more of nightlife than rural areas in the United Arab Emirates. Over the review period

© Euromonitor International

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there was growth in the number of 24-hour outlets mainly as retailers were competing for sales.  Most Emirates have relaxed opening-hour legislation in comparison with other countries such as Saudi Arabia. Retail outlets are open on Friday, the Islamic day of rest, and during prayer times. However, there is the exception of Sharjah, which is governed by Islamic regulations, where retail outlets are closed during Friday prayer at 11.30-13.30hrs, and shopping centres commence at 14.00hrs on Fridays. The same applies for Abu Dhabi on Fridays. Furthermore, all retail outlets are required to close at prayer times in Ras al-Khaimah.  More traditional shops are open during 9.00am-13.00hrs and 16.00-21.00hrs as they close for three hours in between. These retail outlets are mainly located in more rural areas such as Satwa, Al Karama and Deira. They are not located in shopping centres, and close during the day for lunch break and prayer time/rest. Retail landscape  Most retailers are located in urban areas and within shopping centres. This is mainly due to the extreme hot weather conditions in the country, making it uncomfortable for consumers to shop outdoors for most of the year. Retailers mainly focus on high-footfall centres such as Dubai Mall and Mall of the Emirates, also opting for city centre locations rather than out-oftown venues due to proximity purposes regarding consumers. Despite this, there are exceptions such as Dragon Mart and The Outlet Mall, which are significant out-of town shopping centres in the country. Due to their huge retail space they are located in the outer suburbs of the United Arab Emirates.  ‘New Dubai’ was created in the 2000s when the construction boom occurred, which created new residential areas featuring new shopping centres. These were known as Mirdif City Centre, Ibn Battuta Mall, Marina Mall and Mercato and Dubai Mall. In 2010, towards the end of the economic crisis, 50 United Arab Emirates retailers joined forces to form the country’s first retail association, complaining about poor urban planning in relation to shopping centres, to help improve consumers’ experiences.  While shopping centres are well developed and advanced in Dubai, Abu Dhabi has a shortage in quality shopping centres. It is, however, likely to see the opening of at least four shopping centres over the forecast period as economic development and consumer expenditure are looking promising in Abu Dhabi. Yas Mall and Abu Dhabi Mall are due to open over the forecast period, which will improve the quality of the shopping experience there.  Luxury retailers tend to have a limited number of outlets and are mainly located in upmarket shopping centres. The highest concentration of premium brands in Dubai and Abu Dhabi are in locations including Dubai Mall, Mall of the Emirates, Marina Mall in Abu Dhabi, Wafi and Burjuman Centre, and Mirdif City Centre.  Shopping centres are the more convenient option for consumers to shop due to their wise location as well as the extremely hot weather conditions. Furthermore, people in the United Arab Emirates enjoy shopping as a leisure activity, and browsing in shopping centres is a continually growing trend in the country. Hence this has affected sales for traditional outlets over the review period as consumers prefer to shop in centres over stand-alone outlets with the hassle of the weather, which does not help consumer mobility. Furthermore, traditional outlets such as boutiques are single retailers rather than chains and have lower footfall than chains, which have higher distribution coverage across the top shopping centres in the country. Table 40

Number of Shopping Centres 2010-2013

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Growth Source:

Passport

2010

2011

2012

2013

10%

15%

15%

15%

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Cash and Carry  Cash and carry is insignificant in the United Arab Emirates. Most retailers buy on credit or buy in bulk due to their strong relations with wholesalers or manufacturers. This is carried out by well-established hypermarkets and supermarkets in the crockery retailer channel for example.  Furthermore, over the review period the wholesale business began to undergo a shift in 2011to widen their business avenues by adapting more advanced technology that could reduce overheads to allow wholesalers to offer better prices to smaller retailers and help them compete against hypermarkets as modern grocery retailers began to take over traditional channel formats. Hypermarkets usually offer greater price competitiveness due to bulk sales and economies of scale that smaller-grocers cannot match. As wholesalers uptake better inventory management systems, they could cut out wastage and offer better pricing which is expected to help independent small grocers and neighbourhood supermarkets offer wider product portfolios at more attractive and competitive pricing than they are now.  In regard to the number of cash and carry wholesalers, there is no official data on this; however, according to trade press there were 350 companies in control of the wholesale business in the United Arab Emirates in 2011 and Jaleel Wholesale Point is one of the largest especially in fast-moving consumer goods (fmcg).  As independent small grocers lost out to hypermarkets and supermarkets over the review period, wholesalers have been trying to introduce new ways to reduce overheads to offer better prices to smaller retailers. Hypermarkets usually offer greater price competitiveness due to their bulk sales and economies of scale, which independent small grocers cannot offer consumers.  Wholesalers have been operating more advanced stocktaking management, storage systems and delivery services to grocers’ doorsteps and to restaurants. The use of technology and barcoding has improved wholesalers’ stocktaking systems, by helping them monitor their stock in a much more effective way, aiding them to reduce wastage and losses, and helping them to clear their goods in time as they have all their products up to date in their systems. Through this these wholesalers are looking to continue offering better pricing and act as a hypermarket for small grocers. Jaleel Wholesale Point for example introduced a technology known as JWPs over the review period, a popular cash and carry concept in European and US markets, to account for requirements in the Gulf region. It stocks more than 5,000 stockkeeping units in categories, which cover food, non-food, cosmetics, home appliances and other fmcg.  Thorough this concept, wholesalers are able to offer small grocers a wide range of brands at more competitive prices to help them compete with modern grocery retailers such as hypermarkets and supermarkets, as currently consumers go to supermarkets and hypermarkets when they do not find this wide range in independent small grocers. Despite this, cash and carry is still a niche in the country as other channel platforms within modern grocery retailers mainly dominate the market due to their strategic locations, variety of product offerings and competitive price offerings.

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DEFINITIONS This report analyses the market for Retailing in United Arab Emirates. For the purposes of the study, the market has been defined as follows: Store-based retailing: Grocery retailers  Modern grocery retailers  Convenience stores  Discounters  Forecourt retailers: chained forecourt retailers; independent forecourt retailers  Hypermarkets  Supermarkets  Traditional grocery retailers  Independent small grocery retailers  Food/drink/tobacco specialist retailers  Other grocery retailers Non-grocery retailers  Apparel and footwear specialist retailers  Electronics and appliance specialist retailers  Health and beauty specialist retailers  Chemists/pharmacies  Drugstores/parapharmacies  Beauty specialist retailers  Other healthcare specialist retailers  Home and garden specialist retailers  Furniture and homewares stores  Home improvement and gardening stores  Leisure and personal goods specialist retailers  Jewellery and watch specialist retailers  Media product stores  Pet shops and superstores  Sports goods stores  Stationers/office supply stores  Traditional toys and games stores  Other leisure and personal goods specialist retailers  Mixed retailers  Department stores  Variety stores  Mass merchandisers  Warehouse clubs  Other non-grocery retailers Non-store retailing:  Vending  Homeshopping  internet retailing  Direct selling Other terminology:  Eid Al-Fitr – Feast of breaking the fast for Muslims

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 Eid Al Adha – Festive of sacrifice for Muslims

SOURCES Sources used during research include the following: Summary 2 Research Sources Official Sources

Dubai Chamber of Commerce

Trade Associations

Dubai International Finance Centre Middle East Council of Shopping Centers

Trade Press

Retail News Middle East The National

Source:

Euromonitor International

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