DUBAI: The slowdown in the UAE retail industry in the last two years is likely to continue in the short term, according to industry experts at the Middle East Retail Forum, which kicked off on Tuesday.
“In the short term, there are challenges ... growth is slowing down because of [lower] oil prices and general economic conditions ... a slowdown in high value tourism [and] political uncertainty [in the region] … so things are still growing, but at a slower rate than before,” said Shamail Siddiqi, principal at retail consultancy AT Kearney.
Luxury retailers especially have taken a hit from falling oil prices and the drop in tourism from Russia and China this year.
“Russian and Chinese tourists were previously coming in and buying luxury goods. That tourism has slowed down. A lot of it is because of dynamics in their own countries and that impacted luxury sales,” he said.
Nick Peel, chief executive of UAE retailer Marka, said changing consumer demographics is a challenge for retailers in the region. “Uncertainty still surrounds the economic climate,” he added.
The UAE’s retail market expanded by six per cent in 2015, lower than 2014’s growth rate of eight per cent, Siddiqi said, without giving actual figures.
However, he pointed out the UAE’s retail market is still attractive compared to other markets in the world.
“In general, our view in the UAE is optimistic, especially as we go into 2020 …. the infrastructure development is still happening … the retailers that are here are expanding and retailers who are not here are still coming in … as we move forward, it’s going to be what kind of decisions retailers will make, even around their fundamental business model. Technology is changing a lot of things in terms of how to connect with consumers. These decisions will drive how successful they will be,” Peel said.
