Charles Dickens' famous novel, A Tale of Two Cities, opens with the ageless line: "It was the best of times, it was the worst of times." Last Updated: June 5, 2011 <strong>UAE supermarkets use fund to pay for price controls</strong> Retailers will use money set aside for corporate social responsibility to help reduce the impact on profits of the Government's price fixing campaign. <a href="http://www.thenational.ae/business/retail/uae-supermarkets-use-fund-to-pay-for-price-controls">Read article</a> <strong>Marks & Spencer to open in Dubai's Mall of the Emirates </strong> Marks & Spencer is set to open in Mall of the Emirates as part of its expansion across the Gulf. <a href="http://www.thenational.ae/business/retail/marks-spencer-to-open-in-dubais-mall-of-the-emirates">Read article</a> <strong>Retailers need open-door policy</strong> Comment // Retailers are traditionally secretive - even more so when they're family-run. But transparency has its benefits. <a href="http://www.thenational.ae/thenationalconversation/industry-insights/economics/retailers-need-open-door-policy">Read article</a> And although the author was referring to the plight of citizens in 18th century Paris and London, the sentiment is equally applicable to the state of the retail sector in the UAE today. Overall, the retail market has grown spectacularly over the past five years, with total sales up 50 per cent to US$19.75 billion (Dh72.54bn), according to Euromonitor, a data provider. But experts are now divided on whether the sector is booming or merely spluttering along, with many retailers claiming to be experiencing "the best of times", while other stores are much less buoyant. Euromonitor predicts UAE retail sales to grow just 1 per cent this year, some way below the Ministry of Economy's GDP predictions of 3 per cent. "Within retailing, different channels are performing differently, with supermarkets and hypermarkets registering healthy growth, while channels such as jewellers and independent small grocers are faring badly and registering negative growth," says Sana Toukan, the research manager for Euromonitor in the Middle East. Anecdotal evidence from major retailers, however, would indicate an otherwise booming market. Mile Franicevic, the general manager for Ikea in the UAE, which is part of the Al-Futtaim Group, says the retailer is experiencing 6 per cent growth this year compared with the first five months of last year across its portfolio of brands, which include Plug-Ins, Ace and Marks & Spencer. Growth this year at the new Ikea store at Yas Mall has been between 25 and 30 per cent compared with the same period last year, Mr Francicevic says. Richard Adams, a retail analyst at Verdict Research, also says retailers' growth figures are well above baseline GDP growth so far this year. "The UAE retail market is generally healthy, though a subset of retail groups and mall operators still have not recovered from the global economic crisis," he says. Euromonitor's data show little change in the market share for retailers in the UAE over the past five years, with Majid Al Futtaim keeping top spot due to its partnership with Carrefour. The overall market has benefited from the growth in hypermarkets, with the Emke Group, the owner of Lulu Hypermarkets enjoying increased market share. Carrefour has also grown its market share from 6.4 per cent in 2006 to 8.7 per cent last year, while Al-Futtaim's share fell from 6.3 per cent to 5.9 per cent in the same period. "It's a difficult market but there's certainly a customer loyalty bias," Mr Francicevic says. Euromonitor bases its research on data from official statistics, trade associations, company research, interviews and trade sources. Outside hypermarkets, there is a distinct lack of movement in market share among the top retailers. Stuart Gissing, the regional director for Colliers International, a retail consultancy, says there are a number of reasons for this. "[The biggest retailers] offer quicker entry into a market for new brands, quicker geographical spread, opportunity to locate into leading sites, and product alignment," he says. The country's major players are also trying to manage and take advantage of the rise of Abu Dhabi as a retail centre. The capital will become an increasingly competitive market, as about 200,000 square metres of retail space comes available this year. Mushrif Mall, in the centre of Abu Dhabi island, Bawabat Al Sharq Mall in Baniyas and 9712 BMC near Musaffah are all due to be completed this year. Marks & Spencer is moving into Marina Mall and Jumbo Electronics recently launched a store in Abu Dhabi Mall. "A lot of growth will come from Abu Dhabi over the next five years," Mr Adams says. "If you speak with the franchise families - the Alshayers and Al Tayers - it is clear that Abu Dhabi is their number one target right now. Currently, Abu Dhabi is under-shopped, but this will change dramatically." The rise of Abu Dhabi, coupled with the ongoing questions over Dubai's saturated market, makes for a contrasting story of two UAE cities. The pessimists argue Dubai is suffering from an oversupply of shopping space with many malls having to rely on their anchor stores and add more attractions to entice visitors through their doors. The optimists point to a report in April that more than half of all international retail brands reside in the city. Published by CB Richard Ellis, a property consultancy, the report found only London had matched the number of brands as Dubai. "Dubai has a lot going for it," says Mr Adams. "It remains the premier launching pad into the Middle East, new market entrants know that they can access local GCC spenders here before moving into neighbouring markets." Despite this potential, many retailers are replacing their brands in various locations around the city to take advantage of consumer trends. "What worked before may not work now, so a retailing company would change the brand or product or store format," says Mr Gissing. "It is felt that there still remains various retail formats that could work well in this part of the world." One format experts agree will be a success this year is community, or neighbourhood, retailing, which is predicted to grow considerably as a percentage of the retail market. More and more stores are cropping up next to the country's major residential developments with supermarkets such as the Al Maya Group having performed strongly in areas such as Jumeirah Beach Residence in Dubai Marina. According to Euromonitor, convenience stores will record the highest number of outlet openings, with the number of stores expected to reach 244 by the end of this year in Dubai. Convenience stores are set to hamper the dominant growth of hypermarkets of recent years. The community channel is also taking off in Abu Dhabi, with shops in the Al Zeina and Al Raha community projects by the developer Aldar due to open this year.
