Special Features
MENA Hot Spot For Retail Growth
Markets in the Middle East and North Africa (MENA) region become hot spot for growth of international and regional retailers and the UAE ranked seventh in the global retail index, according to a new study by A.T. Kearney.Kuwait was the second most popular expansion destination in the world followed by China and India as the most attractive destination, according to the Global Retail Development Index (GRDI).
In addition to Kuwait, the continued strength of the UAE and Saudi Arabia places these markets among top 10 most attractive retail destinations globally. This high rank highlights the abundant opportunities for further in-country expansion and the ability to leverage regional experiences across the Gulf.
“The attractiveness of the MENA retail markets provides ample opportunities for regional as well as global retailers,” said Martin Fabel, Partner, A.T. Kearney Middle East. “Our research stresses that establishing operations in a portfolio of countries both small and large offers the best path to global success for retailers.”
Countries from MENA region exhibit the most exciting retail growth opportunities for international retailers. The region dominates the rankings and accounts for eight of the top 21 locations: Kuwait (2), Saudi Arabia (4), United Arab Emirates (7), Tunisia (11), Egypt (13), Morocco (15), Turkey (18) and Algeria (21).
Fiscal stimuli in some MENA markets and the region’s rich oil supply have contributed to the positive outlook. The MENA region appears poised for fast recovery from the global turbulence and its retail market has proven resilient. Retail sales are rising, driven by higher disposable incomes, urban population growth, a strengthening middle class and infrastructure investments.
As part of this year’s GRDI, AT Kearney also surveyed 60 retail executives from around the world to identify emerging competitive trends and confirm the GRDI rankings.
The study revealed that expansion is also on the agenda for many emerging market retailers - ninety-two per cent of respondents indicated they are looking to expand beyond their home market, with most expecting to expand into the BRIC countries.
Even though the UAE has moved slightly from 4th to 7th place in this year’s GRDI, it is the only Middle East destination mentioned by the surveyed retail executives as an expansion destination.
“The UAE has been a hot spot for several years and is now entering the next level of maturity. Retailers are looking to build on their stronghold in the UAE to diversify their portfolio across the region and will continue to actively invest in the attractive markets of Saudi Arabia and Kuwait,” said Dan Starta, Partner and Managing Director, A.T. Kearney Middle East.
“Retail investors should build on global best practices and lessons learned in the region, but understanding the unique differences of each country will be critical.”
