Kuwait and Saudi Arabia are not known as international shopping destinations, but they could be the retail hot spots of the future, AT Kearney says. Kuwait was ranked the second most promising market for retailers in the management consultancy's latest Global Retail Development Index, behind China but ahead of India. Saudi Arabia came in fourth, ahead of Brazil.
The UAE ranked number seven, down from fourth place last year. Dan Starta, the managing director of AT Kearney Middle East, said while there were still opportunities in the Emirates, many brands had already made their mark, while Kuwait and Saudi Arabia were less saturated. "[The UAE is] still a core place to be but it's not the next place to go," Mr Starta said. Many global brands have set their sights on the UAE over the years and Dubai has become the second-most popular stop for international retailers behind London and ahead of Paris and New York, data from the property consultancy CB Richard Ellis show. This was driven in part by the rapid expansion of the retail industry and the construction of several shopping centres, including Dubai Mall, one of the world's largest.
But with the flood of retail space, the number of shops per capita is high relative to the distribution in nearby countries, Mr Starta said. Retailers' success in the UAE over the years has been a gateway to opportunities in nearby countries, he said. "The UAE was a great learning experience," Mr Starta said. "It was a relatively painless environment, almost westernised in the way people entered the region.
"It was where people got a foothold, they learned, and they started to wake up to the opportunities elsewhere." Kuwait and Saudi Arabia each get a lift from the IMF's forecast of strong GDP growth this year, at 3 per cent and 3.7 per cent, respectively. The UAE economy is expected to expand by 1.3 per cent. And with Saudi Arabia's relatively young population of more than 29 million and its ranking as the biggest economy in the Gulf, there is broad scope for new retailers in the long term, Mr Starta said.
Michael Atwell, the head of Middle East operations at the Cushman and Wakefield consultancy in Dubai, said the shift towards other Gulf countries stems from the slowed flow of retail developments in the UAE. After the opening of Mirdif City Centre in Dubai this year, there are few retail developments on the horizon, Mr Atwell said. Abu Dhabi will be home to several new shopping centres, such as Yas Mall and Aldar's Central Market and Emporium, but this will develop over the longer term.
"Dubai has had its show," Mr Atwell said. "There aren't many planned future projects. "Abu Dhabi has more coming online but retailers will look where they can extend their franchise and coverage because they need to get market share." aligaya@thenational.ae