retailing in the united arab emirates

8/10/2019 Retailing in the United Arab Emirates

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RETAILING IN THE UNITED ARAB

EMIRATES

Euromonitor International

April 2014


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R E T A I L I N G I N T H E U N I T E D A R A B E M I R A T E S P a s s p o r t I

E u r o m o n i t o r I n t e r n a t i o n a l

LIST OF CONTENTS AND TABLESExecutive Summary ..................................................................................................................... 1

Economic Recovery Brings Sales Growth Back on Track at the End of the Review Period ..... 1Rise in Tourism As Consumer Confidence Picks Up ........................................................... ..... 1Non-grocery Retailing Grasps Market Trend Opportunities While Grocery Retailing Poses

Strong Competition ................................................................................................... ................ 1Majid Al Futtaim Hypermarkets Llc Extends Further Lead in the Retailing Market ................... 2

A Healthy Performance Is Expected Over the Forecast Period ................................................ 2Key Trends and Developments ............................................................... ..................................... 2

Consumer Confidence Picks Up Towards the End of the Review Period ................................. 2Internet Retailing Another Booming Channel ............................................................ ................ 5More Supermarkets and Convenience Stores Emerge As Demand for Convenience Rises .... 7Growing Shopping Centre Developments Lead To More Retail Sales Area ............................. 9

Market Indicators ............................................................... ......................................................... 11

Table 1 Employment in Retailing 2008-2013........................................................... 11Market Data ............................................................ ................................................................. ... 12

Table 2 Sales in Retailing by Channel: Value 2008-2013 ....................................... 12Table 3 Sales in Retailing by Channel: % Value Growth 2008-2013 ....................... 12Table 4 Sales in Store-Based Retailing by Channel: Value 2008-2013 ............... ... 12Table 5 Store-Based Retailing Outlets by Channel: Units 2008-2013 ..................... 12Table 6 Sales in Store-Based Retailing by Channel: % Value Growth 2008-

2013 ............................................................. .............................................. 13Table 7 Store-Based Retailing Outlets by Channel: % Unit Growth 2008-2013 ...... 13Table 8 Sales in Non-store Retailing by Channel: Value 2008-2013 ....................... 13Table 9 Sales in Non-store Retailing by Channel: % Value Growth 2008-2013 ...... 13

Table 10 Sales in Retailing by Grocery vs Non-Grocery: 2008-2013 ........................ 14Table 11 Non-Grocery Retailers: Value Sales, Outlets and Selling Space 2008-2013 ............................................................. .............................................. 14

Table 12 Sales in Non-Grocery Retailers by Channel: Value 2008-2013 .................. 14Table 13 Non-Grocery Retailers Outlets by Channel: Units 2008-2013 .................... 14Table 14 Sales in Non-Grocery Retailers by Channel: % Value Growth 2008-

2013 ............................................................. .............................................. 15Table 15 Non-Grocery Retailers Outlets by Channel: % Unit Growth 2008-2013 ..... 15Table 16 Retailing Company Shares: % Value 2009-2013 ....................................... 16Table 17 Retailing Brand Shares: % Value 2010-2013 ............................................. 16Table 18 Store-Based Retailing Company Shares: % Value 2009-2013 .................. 17Table 19 Store-Based Retailing Brand Shares: % Value 2010-2013 ........................ 17

Table 20 Store-Based Retailing Brand Shares: Outlets 2010-2013 .......................... 18Table 21 Non-store Retailing Company Shares: % Value 2009-2013 ....................... 19Table 22 Non-store Retailing Brand Shares: % Value 2010-2013 ............................ 19Table 23 Non-Grocery Retailers Company Shares: % Value 2009-2013 .................. 20Table 24 Non-Grocery Retailers Brand Shares: % Value 2010-2013 ....................... 20Table 25 Non-Grocery Retailers Brand Shares: Outlets 2010-2013 ......................... 21Table 26 Non-Grocery Retailers Brand Shares: Selling Space 2010-2013 ............... 21Table 27 Forecast Sales in Retailing by Channel: Value 2013-2018 ........................ 22Table 28 Forecast Sales in Retailing by Channel: % Value Growth 2013-2018 ........ 22


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Table 29 Forecast Sales in Store-Based Retailing by Channel: Value 2013-2018 ............................................................. .............................................. 22

Table 30 Forecast Store-Based Retailing Outlets by Channel: Units 2013-2018 ...... 23Table 31 Forecast Sales in Store-Based Retailing by Channel: % Value Growth

2013-2018 ............................................................... ................................... 23Table 32 Forecast Store-Based Retailing Outlets by Channel: % Unit Growth

2013-2018 ............................................................... ................................... 23Table 33 Forecast Sales in Non-store Retailing by Channel: Value 2013-2018 ........ 23Table 34 Forecast Sales in Non-store Retailing by Channel: % Value Growth

2013-2018 ............................................................... ................................... 24Table 35 Non-Grocery Retailers Forecasts: Value Sales, Outlets and Selling

Space 2013-2018 .............................................................. ......................... 24Table 36 Forecast Sales in Non-Grocery Retailers by Channel: Value 2013-

2018 ............................................................. .............................................. 24Table 37 Forecast Non-Grocery Retailers Outlets by Channel: Units 2013-2018 ..... 25Table 38 Forecast Sales in Non-Grocery Retailers by Channel: % Value

Growth 2013-2018 ..................................................................................... 25Table 39 Forecast Non-Grocery Retailers Outlets by Channel: % Unit Growth

2013-2018 ............................................................... ................................... 26

Appendix ........................................................................................................... ......................... 26

Operating Environment ............................................................. .............................................. 26

Summary 1 Standard Opening Hours by Channel Type 2013 ....................................... 27Table 40 Number of Shopping Centres 2010-2013 ................................................... 28

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

Summary 2 Research Sources ............................................................. ......................... 31


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R E T A I L I N G I N T H E U N I T E D A R A B E M I R A T E S P a s s p o r t 1


RETAILING IN THE UNITED ARABEMIRATES

EXECUTIVE SUMMARY

Economic Recovery Brings Sales Growth Back on Track at the End ofthe 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 WhileGrocery 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. Non-

grocery 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 RetailingMarket

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 andChinese companies trying to make money through foreign investments, as well as further real-

estate 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

countrys retailing market contributes approximately one third of the countrys 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 grownrapidly 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 non-

grocery 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 suchas 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

retailers 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 real-

estate picked up in 2013, which also contributed to the need for more supermarkets withinresidential 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 agood 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 numberof 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 personalcare 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 moreaffordable than in non-grocery retailers. Higher-income groups will still consume from non-

grocery 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, Gant and Lulu Hypermarket competing with cheaper online prices against non-

grocery electronics and appliance specialist retailers.

Despite this, internet retailing is expected to form 3% of constant value sales of retailing in2018, 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 countrys 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 countrys 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 regions 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 e-

commerce 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. PayPals


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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

regions 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 becauseconsumers 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 store-

based 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; Gant 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 dialoguewith 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 companys 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 Gant 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 non-

grocery 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 purchasetransactions 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 aremore accustomed to making online transactions to fit with the more convenient lifestyle that they

seek.

In addition, the widespread use of smartphones is l ikely 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

Gant 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 regions first e-shopping centre, named Tejuri.com, was launched in March 2013 as away 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 forConvenience 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 thereview 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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Gant 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 theopportunity 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 retailers 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 thestandard 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 Groups 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-establishedentrepreneurs 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 expandby acquiring Abraaj Groups 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 SalesArea

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 countrys 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-estateprices 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%,


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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 Dhabis 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 inthe 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-estatedevelopments 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,

Asdas 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 non-

grocery 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. Gant 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 developmentsover 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 Gant-led neighbourhood shopping centre, while Nakheel was looking at doubling the size


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of Ibn Battuta and expanding Dragon Mart shopping centre in 2013. The worlds 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 worlds 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 beengiven 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 top-

tier 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 openup 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 re-

launch 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 thegrowth 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

2008 2009 2010 2011 2012 2013

Total employment ('000 4,341.9 5,695.6 5,751.7 5,735.7 5,677.3 5,675.4people)

Employment in retailing 530.0 510.0 580.0 620.0 689.0 710.0('000 people)

Employment in retailing 12.2 9.0 10.1 10.8 12.1 12.5(%) (% of totalemployment)


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Source: 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

2008 2009 2010 2011 2012 2013

Store-based Retailing 76,544.3 78,769.0 81,280.1 84,590.3 88,776.8 94,045.2Non-Store Retailing 1,696.2 1,823.4 2,007.2 2,229.9 2,505.6 2,957.1Retailing 78,240.5 80,592.4 83,287.3 86,820.2 91,282.4 97,002.3

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

Table 3 Sales in Retailing by Channel: % Value Growth 2008-2013

% current value growth, retail value rsp excl sales tax

2012/13 2008-13 CAGR 2008/13 Total

Store-based Retailing 5.9 4.2 22.9Non-Store Retailing 18.0 11.8 74.3Retailing 6.3 4.4 24.0


Table 4 Sales in Store-Based Retailing by Channel: Value 2008-2013


2008 2009 2010 2011 2012 2013

Grocery Retailers 31,136.1 31,631.7 32,352.7 33,495.0 35,156.9 37,029.4Non-Grocery Retailers 45,408.2 47,137.3 48,927.4 51,095.3 53,619.9 57,015.8Luxury Retail - - - 2,344.4 2,607.7 2,992.4Store-based Retailing 76,544.3 78,769.0 81,280.1 84,590.3 88,776.8 94,045.2


Table 5 Store-Based Retailing Outlets by Channel: Units 2008-2013

outlets2008 2009 2010 2011 2012 2013

Grocery Retailers 9,731 9,670 9,565 9,413 9,405 9,514Non-Grocery Retailers 10,483 10,738 11,005 11,311 11,656 12,039Luxury Retail - - - 133 148 159Store-based Retailing 20,214 20,408 20,570 20,724 21,061 21,553


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Table 6 Sales in Store-Based Retailing by Channel: % Value Growth 2008-2013


2012/13 2008-13 CAGR 2008/13 Total

Grocery Retailers 5.3 3.5 18.9Non-Grocery Retailers 6.3 4.7 25.6Luxury Retail 14.8 - -Store-based Retailing 5.9 4.2 22.9


Table 7 Store-Based Retailing Outlets by Channel: % Unit Growth 2008-2013

% unit growth2012/13 2008-13 CAGR 2008/13 Total

Grocery Retailers 1.2 -0.5 -2.2Non-Grocery Retailers 3.3 2.8 14.8Luxury Retail 7.4 - -Store-based Retailing 2.3 1.3 6.6


Table 8 Sales in Non-store Retailing by Channel: Value 2008-2013


2008 2009 2010 2011 2012 2013

Direct Selling 364.5 383.3 423.1 473.3 540.4 612.4Homeshopping 58.0 68.7 75.6 80.6 85.8 90.2Internet Retailing 1,178.0 1,251.2 1,359.1 1,497.6 1,670.5 2,000.2Vending 95.7 120.2 149.4 178.4 208.8 254.3Non-Store Retailing 1,696.2 1,823.4 2,007.2 2,229.9 2,505.6 2,957.1


Note: Vending data captures vending systems installed in public and semi-captive environments only. Forfurther details refer to definitions.

Table 9 Sales in Non-store Retailing by Channel: % Value Growth 2008-2013


2012/13 2008-13 CAGR 2008/13 Total

Direct Selling 13.3 10.9 68.0Homeshopping 5.1 9.2 55.6Internet Retailing 19.7 11.2 69.8Vending 21.8 21.6 165.8


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Non-Store Retailing 18.0 11.8 74.3



Table 10 Sales in Retailing by Grocery vs Non-Grocery: 2008-2013

% retail value rsp excl sales tax2008 2009 2010 2011 2012 2013

Grocery 39.0 40.0 40.0 41.0 42.3 43.4Non-Grocery 61.0 60.0 60.0 59.0 57.7 56.6Total 100.0 100.0 100.0 100.0 100.0 100.0


Table 11 Non-Grocery Retailers: Value Sales, Outlets and Selling Space 2008-2013

2008 2009 2010 2011 2012 2013

Value sales AED million 45,408.2 47,137.3 48,927.4 51,095.3 53,619.9 57,015.8Outlets 10,483.0 10,738.0 11,005.0 11,311.0 11,656.0 12,039.0Selling Space '000 sq m 2,609.1 2,773.6 2,864.1 2,936.3 3,020.5 3,117.5


Table 12 Sales in Non-Grocery Retailers by Channel: Value 2008-2013


2008 2009 2010 2011 2012 2013

Apparel and Footwear 12,357.4 12,620.6 13,025.7 13,589.8 14,337.2 15,453.9Specialist Retailers

Electronics and 5,106.0 5,321.0 5,587.6 5,891.0 6,232.2 6,601.8Appliance SpecialistRetailers

Health and Beauty 7,100.0 7,365.4 7,713.5 8,123.9 8,586.2 9,122.7Specialist Retailers

Home and Garden 6,483.4 6,746.3 7,029.8 7,340.1 7,662.1 8,193.5Specialist Retailers

Leisure and Personal 8,176.9 8,547.3 8,801.8 9,122.8 9,505.3 10,041.0

Goods SpecialistRetailers

Mixed Retailers 4,521.0 4,773.4 4,944.0 5,140.0 5,370.4 5,626.8Other Non-Grocery 1,663.4 1,763.2 1,824.9 1,887.7 1,926.4 1,976.1

RetailersNon-Grocery Retailers 45,408.2 47,137.3 48,927.4 51,095.3 53,619.9 57,015.8


Table 13 Non-Grocery Retailers Outlets by Channel: Units 2008-2013


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outlets2008 2009 2010 2011 2012 2013

Apparel and Footwear 2,506 2,556 2,633 2,738 2,808 2,907Specialist Retailers

Electronics and 419 427 439 452 463 476Appliance SpecialistRetailers

Health and Beauty 2,095 2,146 2,187 2,259 2,345 2,431Specialist Retailers

Home and Garden 1,590 1,621 1,640 1,668 1,713 1,764Specialist Retailers

Leisure and Personal 2,565 2,650 2,745 2,818 2,916 3,008Goods SpecialistRetailers

Mixed Retailers 349 359 367 372 384 396Other Non-Grocery 959 979 994 1,004 1,027 1,057

RetailersNon-Grocery Retailers 10,483 10,738 11,005 11,311 11,656 12,039


Table 14 Sales in Non-Grocery Retailers by Channel: % Value Growth 2008-2013


2012/13 2008-13 CAGR 2008/13 Total

Apparel and Footwear Specialist 7.8 4.6 25.1Retailers

Electronics and Appliance Specialist 5.9 5.3 29.3Retailers

Health and Beauty Specialist Retailers 6.2 5.1 28.5Home and Garden Specialist Retailers 6.9 4.8 26.4Leisure and Personal Goods Specialist 5.6 4.2 22.8

RetailersMixed Retailers 4.8 4.5 24.5Other Non-Grocery Retailers 2.6 3.5 18.8Non-Grocery Retailers 6.3 4.7 25.6


Table 15 Non-Grocery Retailers Outlets by Channel: % Unit Growth 2008-2013





RetailersMixed Retailers 3.1 2.6 13.5Other Non-Grocery Retailers 2.9 2.0 10.2


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Non-Grocery Retailers 3.3 2.8 14.8


Table 16 Retailing Company Shares: % Value 2009-2013

% retail value rsp excl sales taxCompany 2009 2010 2011 2012 2013

Majid Al Futtaim 6.9 7.2 7.4 7.8 7.9Hypermarkets LLC

Emke Group 3.9 4.3 4.8 4.9 5.0Al-Futtaim Group LLC 3.8 4.1 4.2 4.5 4.9Union Co-operative 3.4 3.5 4.0 4.1 4.1

SocietyDamas LLC 5.2 3.7 3.7 3.8 3.9Landmark Group 2.1 2.5 2.8 3.0 3.1

Abu Dhabi Cooperative 1.7 1.8 2.1 2.1 2.2Society

Azadea Group 1.3 1.5 1.7 1.9 2.0M H Alshaya Co 1.4 1.5 1.7 1.8 1.9Paris Gallery LLC 1.8 1.8 1.9 1.6 1.9Sharaf DG LLC 1.2 1.3 1.5 1.6 1.8T Choithram & Sons Dubai 1.4 1.5 1.6 1.6 1.7Life Healthcare Group 1.1 1.1 1.1 1.2 1.2Jumbo Electronics Co LLC 1.1 1.1 1.1 1.2 1.2

Alphamed Group 0.9 0.9 1.0 1.0 1.1Majid Al Futtaim 0.9 0.9 1.0 1.0 1.1

Fashion LLCSpinneys Group Ltd 1.0 1.0 1.0 1.0 1.1

Al Tayer Group 0.7 0.9 0.9 1.0 1.0National Trading & 0.9 0.9 0.9 0.9 1.0

Development Est (NTDE)Rivoli Group 0.9 0.9 0.9 0.9 1.0Others 58.1 57.4 54.5 53.1 50.9Total 100.0 100.0 100.0 100.0 100.0


Table 17 Retailing Brand Shares: % Value 2010-2013

% retail value rsp excl sales taxBrand Company 2010 2011 2012 2013

Carrefour Majid Al Futtaim 6.9 7.1 7.2 7.3Hypermarkets LLC

Union Co-operative 3.5 4.0 4.1 4.1Society

Damas Damas LLC 3.7 3.7 3.8 3.9IKEA Al-Futtaim Group LLC 2.4 2.5 2.7 3.0Lulu Hypermarket Emke Group 2.2 2.6 2.8 3.0

ADCOOP Abu Dhabi Cooperative 1.8 2.1 2.1 2.2Society

Paris Gallery Paris Gallery LLC 1.8 1.9 1.6 1.9Sharaf DG Sharaf DG LLC 1.3 1.4 1.5 1.8Choithram T Choithram & Sons Dubai 1.5 1.6 1.6 1.7Life Life Healthcare Group 1.1 1.1 1.2 1.2


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Jumbo Electronics Jumbo Electronics Co LLC 1.1 1.1 1.2 1.2Bin Sina Alphamed Group 0.9 1.0 1.0 1.1E-Max Landmark Group 0.8 1.0 1.1 1.1Spinneys Spinneys Group Ltd 1.0 1.0 1.0 1.1Home Centre Landmark Group 0.9 0.9 0.9 1.0

Smoker's Centre National Trading & 0.9 0.9 0.9 1.0Development Est (NTDE)

Rivoli Rivoli Group 0.9 0.9 0.9 0.9Jacky's Jacky's Electronics LLC 0.9 0.9 0.8 0.9Marina Marina Home Interiors 0.6 0.7 0.7 0.8Emirates 0.7 0.7 0.8 0.8

Cooperative SocietyOthers 65.0 62.6 61.9 60.2Total 100.0 100.0 100.0 100.0


Table 18 Store-Based Retailing Company Shares: % Value 2009-2013


Majid Al Futtaim 7.1 7.4 7.5 7.9 8.0Hypermarkets LLC

Emke Group 4.0 4.4 4.9 5.0 5.2Al-Futtaim Group LLC 3.9 4.2 4.3 4.6 5.0Union Co-operative 3.5 3.6 4.1 4.2 4.2

SocietyDamas LLC 5.3 3.8 3.8 3.9 4.0Landmark Group 2.2 2.5 2.9 3.0 3.2

Abu Dhabi Cooperative 1.8 1.9 2.2 2.2 2.3Society

Azadea Group 1.4 1.5 1.7 1.9 2.1M H Alshaya Co 1.5 1.6 1.7 1.9 2.0Paris Gallery LLC 1.8 1.9 1.9 1.7 2.0Sharaf DG LLC 1.2 1.4 1.5 1.6 1.9T Choithram & Sons Dubai 1.5 1.5 1.7 1.7 1.7Life Healthcare Group 1.1 1.1 1.2 1.2 1.3Jumbo Electronics Co LLC 1.2 1.1 1.1 1.2 1.3

Alphamed Group 0.9 0.9 1.0 1.1 1.2Majid Al Futtaim 0.9 1.0 1.0 1.0 1.1

Fashion LLCSpinneys Group Ltd 1.0 1.0 1.1 1.1 1.1

Al Tayer Group 0.7 0.9 1.0 1.0 1.1National Trading & 1.0 0.9 0.9 0.9 1.0

Development Est (NTDE)

Rivoli Group 0.9 0.9 0.9 0.9 1.0Others 57.1 56.4 53.4 51.9 49.5Total 100.0 100.0 100.0 100.0 100.0


Table 19 Store-Based Retailing Brand Shares: % Value 2010-2013



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Mini Mart Emirates National Oil 40 41 - -Co (ENOC)

Others 19,543 19,671 20,020 20,476Total 20,570 20,724 21,061 21,553

Source: Euromonitor International from official statistics, trade associations, trade press, company research,

trade interviews, trade sources

Table 21 Non-store Retailing Company Shares: % Value 2009-2013


Jabbar Internet Group 4.3 5.0 10.0 10.2 9.6FZ LLC

Amazon.com Inc 4.0 4.7 5.2 6.0 5.8Majid Al Futtaim - - 3.8 4.5 4.9

Hypermarkets LLCellamart.com 1.8 1.9 2.1 2.3 1.9Trolley Trading - - - 2.3 1.7Early Bird Catering 1.0 1.2 1.3 1.5 1.4

Services LLCJadoPado Ltd - - 0.5 0.6 1.3Namshi General Trading - - - 1.3 1.2

LLCMiddle East Trading 0.7 0.8 1.0 1.1 1.1

Store LLCJackson Trading Co Llc 1.2 1.2 1.1 1.1 1.0

Al Hathboor 0.8 0.8 0.7 0.7 0.6International Avon

Net-A-Porter Ltd - 0.5 0.6 0.6 0.5MarkaVIP - - 0.4 0.5 0.5Reebonz HK Ltd - - - 0.4 0.4

Maktoob Inc - - - - -Others 86.1 83.9 73.4 66.9 68.3Total 100.0 100.0 100.0 100.0 100.0



Table 22 Non-store Retailing Brand Shares: % Value 2010-2013


Amazon Amazon.com Inc 4.7 5.2 6.0 5.8Souq.com Jabbar Internet Group 5.0 5.6 5.5 5.4

FZ LLCCarrefour Majid Al Futtaim - 3.8 4.5 4.9

Hypermarkets LLCSukar Jabbar Internet Group - 4.4 4.7 4.2

FZ LLCEllamart ellamart.com 1.9 2.1 2.3 1.9Trolley Trolley Trading - - 2.3 1.7Earlybird Early Bird Catering 1.2 1.3 1.5 1.4

Services LLCJadopado.com JadoPado Ltd - 0.5 0.6 1.3


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namshi Namshi General Trading LLC - - 1.3 1.2Bebida Middle East Trading 0.8 1.0 1.1 1.1

Store LLCDallmayr Kaffee Jackson Trading Co Llc 1.2 1.1 1.1 1.0

Avon Al Hathboor 0.8 0.7 0.7 0.6

International AvonNet-A-Porter Net-A-Porter Ltd 0.5 0.6 0.6 0.5MarkaVIP - 0.4 0.5 0.5Reebonz Reebonz HK Ltd - - 0.4 0.4Souq.com Maktoob Inc - - - -Others 83.9 73.4 66.9 68.3Total 100.0 100.0 100.0 100.0



Table 23 Non-Grocery Retailers Company Shares: % Value 2009-2013


Al-Futtaim Group LLC 6.6 6.9 7.2 7.7 8.3Damas LLC 8.9 6.3 6.4 6.4 6.6Landmark Group 3.6 4.2 4.8 5.0 5.3

Azadea Group 2.3 2.5 2.8 3.2 3.5M H Alshaya Co 2.5 2.6 2.9 3.1 3.3Paris Gallery LLC 3.1 3.1 3.2 2.8 3.3Sharaf DG LLC 2.1 2.3 2.5 2.7 3.1Life Healthcare Group 1.8 1.9 2.0 2.0 2.1Jumbo Electronics Co LLC 1.9 1.8 1.9 2.0 2.1

Alphamed Group 1.5 1.6 1.7 1.8 1.9

Majid Al Futtaim 1.6 1.6 1.6 1.7 1.8Fashion LLCAl Tayer Group 1.1 1.5 1.6 1.7 1.8Rivoli Group 1.5 1.5 1.6 1.6 1.6Jacky's Electronics LLC 1.5 1.5 1.5 1.4 1.5Marina Home Interiors 1.0 1.0 1.1 1.3 1.4

Apparel Group 1.0 1.1 1.1 1.2 1.3Jashanmal National Co 1.4 1.3 1.3 1.3 1.2DM Healthcare LLC 1.0 1.1 1.1 1.1 1.2Sharaf Retail LLC 0.6 0.6 0.9 1.0 1.1Emke Group 1.2 1.2 1.2 1.1 1.1Others 54.0 54.2 51.8 50.0 46.6Total 100.0 100.0 100.0 100.0 100.0


Table 24 Non-Grocery Retailers Brand Shares: % Value 2010-2013


Damas Damas LLC 6.3 6.4 6.4 6.6IKEA Al-Futtaim Group LLC 4.1 4.3 4.7 5.1Paris Gallery Paris Gallery LLC 3.1 3.2 2.8 3.3Sharaf DG Sharaf DG LLC 2.2 2.4 2.6 3.0


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Life Life Healthcare Group 1.9 2.0 2.0 2.1Jumbo Electronics Jumbo Electronics Co LLC 1.8 1.9 2.0 2.1Bin Sina Alphamed Group 1.6 1.7 1.8 1.9E-Max Landmark Group 1.3 1.7 1.8 1.9Home Centre Landmark Group 1.5 1.5 1.6 1.7

Rivoli Rivoli Group 1.5 1.5 1.5 1.6Jacky's Jacky's Electronics LLC 1.5 1.5 1.4 1.5Marina Marina Home Interiors 1.0 1.1 1.3 1.4

Ace Hardware Al-Futtaim Group LLC 1.1 1.1 1.2 1.2Aster Pharmacy DM Healthcare LLC 1.1 1.1 1.1 1.2Aldo Apparel Group 1.0 1.0 1.1 1.2Forever 21 Sharaf Retail LLC 0.6 0.9 1.0 1.1Jashanmal Jashanmal National Co 1.2 1.2 1.2 1.1Splash Landmark Group 0.9 1.0 1.0 1.1Debenhams M H Alshaya Co 0.8 0.9 1.0 1.0The One One Retail Network Ltd, 0.7 0.8 0.9 1.0

TheOthers 64.7 62.8 61.7 59.1Total 100.0 100.0 100.0 100.0


Table 25 Non-Grocery Retailers Brand Shares: Outlets 2010-2013

sites/outletsBrand Company 2010 2011 2012 2013

Damas Damas LLC 123 126 131 141Life Life Healthcare Group 58 63 70 70

Aster Pharmacy DM Healthcare LLC 59 64 69 69Aldo Apparel Group 55 56 56 59Rivoli Rivoli Group 32 35 38 39

Bin Sina Alphamed Group 43 36 36 37Pierre Cardin Paris Group LLC 32 34 36 37Boots M H Alshaya Co 28 27 33 35

Al Jaber Optical Bausch & Lomb Inc 27 29 31 35Mothercare M H Alshaya Co 31 32 33 34Splash Landmark Group 25 26 30 33Grand Optics Grand Optics LLC 27 28 29 30Sun & Sand Sun & Sand LLC 22 29 29 29Nine West Apparel Group 22 25 26 28

Aldo Accessories Apparel Group 22 24 26 28Paris Gallery Paris Gallery LLC 27 26 17 26The Body Shop Cosmetics Trading LLC 18 18 25 25

Arabian Oud Arabian Oud Co 22 24 24 24Yateem Optician Yateem Group, The 19 21 23 24

Max Landmark Group 14 13 10 23Others 10,299 10,575 10,884 11,213Total 11,005 11,311 11,656 12,039


Table 26 Non-Grocery Retailers Brand Shares: Selling Space 2010-2013

surface area '000 sq mBrand Company 2010 2011 2012 2013


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Pan Emirates 32.5 32.5 81.2 101.2IKEA Al-Futtaim Group LLC 30.0 52.0 52.0 52.0Splash Landmark Group 39.0 41.4 47.9 51.4Sharaf DG Sharaf DG LLC 33.4 36.7 48.9 49.5Marks & Spencer Al-Futtaim Group LLC 36.6 37.8 44.4 44.4

Home Centre Landmark Group 46.5 46.5 42.3 42.3Debenhams M H Alshaya Co 36.0 37.9 37.9 37.9Max Landmark Group 33.6 31.9 24.5 29.4Boots M H Alshaya Co 24.5 25.6 27.1 27.9Sun & Sand Sun & Sand LLC 21.3 27.1 27.0 27.0Woolworths Sharaf DG LLC 31.3 27.0 27.0 27.0

Ace Hardware Al-Futtaim Group LLC 15.8 15.8 19.7 25.5E-Max Landmark Group 17.2 23.0 23.0 23.5Homes r Us Lals Group 15.3 15.3 18.7 20.5BHS Al Maya Group 9.0 9.0 14.0 20.0Toys "R" Us Al-Futtaim Group LLC 14.5 16.9 16.9 19.0Bloomingdales Al Tayer Group 18.5 18.5 18.5 18.5Next M H Alshaya Co 16.6 16.6 16.6 18.2The One One Retail Network Ltd, 18.9 18.9 17.3 17.2

TheForever 21 Sharaf Retail LLC 14.7 16.0 16.0 16.5Others 2,358.9 2,389.9 2,399.6 2,448.7Total 2,864.1 2,936.3 3,020.5 3,117.5


Table 27 Forecast Sales in Retailing by Channel: Value 2013-2018


2013 2014 2015 2016 2017 2018

Store-based Retailing 94,045.2 98,810.5 103,086.6 106,896.9 110,663.5 114,338.6Non-Store Retailing 2,957.1 3,381.7 3,818.0 4,250.4 4,778.4 5,397.2Retailing 97,002.3 102,192.2 106,904.7 111,147.3 115,441.9 119,735.7

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

Note: Forecast value data in constant terms

Table 28 Forecast Sales in Retailing by Channel: % Value Growth 2013-2018

% constant value growth, retail value rsp excl sales tax

2013-18 CAGR 2013/18 TOTAL

Store-based Retailing 4.0 21.6Non-Store Retailing 12.8 82.5Retailing 4.3 23.4


Table 29 Forecast Sales in Store-Based Retailing by Channel: Value 2013-2018



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2013 2014 2015 2016 2017 2018

Grocery Retailers 37,029.4 39,080.8 40,786.4 42,160.9 43,487.0 44,799.1Non-Grocery Retailers 57,015.8 59,729.7 62,300.2 64,736.0 67,176.5 69,539.5Luxury Retail 2,992.4 - - - - -

Store-based Retailing 94,045.2 98,810.5 103,086.6 106,896.9 110,663.5 114,338.6Source: Euromonitor International from trade associations, trade press, company research, trade interviews,

trade sourcesNote: Forecast value data in constant terms

Table 30 Forecast Store-Based Retailing Outlets by Channel: Units 2013-2018

outlets2013 2014 2015 2016 2017 2018

Grocery Retailers 9,514 9,676 9,923 10,117 10,298 10,506Non-Grocery Retailers 12,039 12,399 12,764 13,133 13,423 13,689Luxury Retail 159 - - - - -

Store-based Retailing 21,553 22,075 22,687 23,250 23,721 24,195


Table 31 Forecast Sales in Store-Based Retailing by Channel: % Value Growth 2013-2018


2013-18 CAGR 2013/18 TOTAL

Grocery Retailers 3.9 21.0

Non-Grocery Retailers 4.1 22.0Luxury Retail - -Store-based Retailing 4.0 21.6


Table 32 Forecast Store-Based Retailing Outlets by Channel: % Unit Growth 2013-2018


Grocery Retailers 2.0 2.0 10.4

Non-Grocery Retailers 2.0 2.6 13.7Luxury Retail - - -Store-based Retailing 2.0 2.3 12.3


Table 33 Forecast Sales in Non-store Retailing by Channel: Value 2013-2018



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2013 2014 2015 2016 2017 2018

Direct Selling 612.4 707.1 800.6 862.0 923.3 976.4Homeshopping 90.2 94.3 97.6 100.5 102.7 105.0Internet Retailing 2,000.2 2,269.0 2,576.9 2,917.0 3,358.6 3,904.1

Vending 254.3 311.3 343.0 370.9 393.8 411.7Non-Store Retailing 2,957.1 3,381.7 3,818.0 4,250.4 4,778.4 5,397.2


Note 1: Vending data captures vending systems installed in public and semi-captive environments only. Forfurther details refer to definitions

Note 2: Forecast value data in constant terms

Table 34 Forecast Sales in Non-store Retailing by Channel: % Value Growth 2013-2018


2013-18 CAGR 2013/18 TOTAL

Direct Selling 9.8 59.4Homeshopping 3.1 16.4Internet Retailing 14.3 95.2Vending 10.1 61.9Non-Store Retailing 12.8 82.5


Note: Vending data captures vending systems installed in public and semi-captive environments only. Forfurther details refer to definitions

Table 35 Non-Grocery Retailers Forecasts: Value Sales, Outlets and Selling Space

2013-2018

2013 2014 2015 2016 2017 2018

Value sales AED million 57,015.8 59,729.7 62,300.2 64,736.0 67,176.5 69,539.5Outlets 12,039.0 12,399.0 12,764.0 13,133.0 13,423.0 13,689.0Selling Space '000 sq m 3,117.5 3,211.5 3,304.4 3,396.6 3,482.4 3,557.1



Table 36 Forecast Sales in Non-Grocery Retailers by Channel: Value 2013-2018


2013 2014 2015 2016 2017 2018

Apparel and Footwear 15,453.9 16,300.0 17,090.9 17,809.4 18,503.9 19,186.6Specialist Retailers

Electronics and 6,601.8 6,912.7 7,154.6 7,360.0 7,556.5 7,709.1Appliance SpecialistRetailers

Health and Beauty 9,122.7 9,535.5 9,899.1 10,202.2 10,492.8 10,761.4Specialist Retailers

Home and Garden 8,193.5 8,631.9 9,024.1 9,351.5 9,674.5 9,974.1


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Specialist RetailersLeisure and Personal 10,041.0 10,516.1 11,023.3 11,565.2 12,140.6 12,731.0

Goods SpecialistRetailers

Mixed Retailers 5,626.8 5,816.0 6,094.3 6,409.5 6,739.2 7,079.5

Other Non-Grocery 1,976.1 2,017.5 2,013.8 2,038.1 2,068.9 2,097.7Retailers

Non-Grocery Retailers 57,015.8 59,729.7 62,300.2 64,736.0 67,176.5 69,539.5



Table 37 Forecast Non-Grocery Retailers Outlets by Channel: Units 2013-2018

outlets2013 2014 2015 2016 2017 2018

Apparel and Footwear 2,907 3,013 3,137 3,287 3,405 3,513

Specialist RetailersElectronics and 476 493 504 514 521 529

Appliance SpecialistRetailers

Health and Beauty 2,431 2,515 2,610 2,699 2,762 2,829Specialist Retailers

Home and Garden 1,764 1,805 1,842 1,874 1,903 1,927Specialist Retailers

Leisure and Personal 3,008 3,087 3,154 3,217 3,271 3,314Goods SpecialistRetailers

Mixed Retailers 396 406 416 425 431 436Other Non-Grocery 1,057 1,080 1,101 1,117 1,130 1,141

Retailers

Non-Grocery Retailers 12,039 12,399 12,764 13,133 13,423 13,689Source: Euromonitor International from trade associations, trade press, company research, trade interviews,

trade sources

Table 38 Forecast Sales in Non-Grocery Retailers by Channel: % Value Growth 2013-2018


2013-18 CAGR 2013/18 TOTAL

Apparel and Footwear Specialist Retailers 4.4 24.2Electronics and Appliance Specialist Retailers 3.1 16.8

Health and Beauty Specialist Retailers 3.4 18.0Home and Garden Specialist Retailers 4.0 21.7Leisure and Personal Goods Specialist Retailers 4.9 26.8Mixed Retailers 4.7 25.8Other Non-Grocery Retailers 1.2 6.2Non-Grocery Retailers 4.1 22.0



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Table 39 Forecast Non-Grocery Retailers Outlets by Channel: % Unit Growth 2013-2018





RetailersMixed Retailers 1.2 1.9 10.1Other Non-Grocery Retailers 1.0 1.5 7.9Non-Grocery Retailers 2.0 2.6 13.7


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 droppedtremendously. 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 thes

retailing in the united arab emirates

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