São Paulo – Retail sales in the United Arab Emirates are expected to grow by 13% to hit USD 58 billion by the end of 2021, a new analysis from Dubai Chamber of Commerce and Industry has projected, according to newspaper Gulf Business. The growth in retail will be supported by pent up consumer demand in the second half of the year, as well as the COVID-19 vaccination program and the Expo 2020 Dubai, scheduled to kick off on October 1st.
The analysis, based on recent data from Euromonitor, predicted that sales are forecast to maintain 6.6% annual growth in the medium term to reach USD 70.5 billion by 2025. Store-based retailing is forecast to grow, but non-store retailing is forecast to grow even more, reported state news agency WAM.
Progress related to the UAE’s vaccination campaigns is expected to boost demand in the second half of this year and attract consumers and tourists back to stores. Expo 2020 Dubai is also expected to be a major catalyst for the recovery of the retail sector, in addition to the support and incentives provided by governments to business sectors at the federal and local levels.
The UAE currently leads the Middle East and North Africa (MENA) region in terms of household spending on e-commerce at USD 2,554 per household, which is twice the value of the global average of USD 1,156, and four times the value of the average in the MENA region (USD 629).
According to real-state consulting firm JLL, Dubai saw 110,000 square meters of retail gross leasable area completed in 2020, which brings the emirate’s total retail stock to 4.2 million square meters. Meanwhile, Abu Dhabi retail space stock remained unchanged at 2.8 million square meters. During 2021, Dubai is expected to see 761,000 square meters of retail gross leasable area added to the market, while 293,000 square metres of new retail gross leasable area is expected in Abu Dhabi.
The analysis added that the COVID-led digital shift has created new growth opportunities for regional expansion for traditional retail and e-commerce companies based in the UAE, especially in markets with large populations, such as Saudi Arabia, Egypt, Algeria and Morocco.
Translated by Guilherme Miranda
