UAE Consumers Trend Toward Convenience Stores

Although big formats dominate the United Arab Emirates retail landscape, convenience formats help retailers expand their local footprint.

June 18, 2012

DUBAI - Tourism, a growing population and an "open for business" culture are helping the United Arab Emirates establish itself as the go-to market for both high-end and mid-market global retailers, reports Zawya.com.

Despite regional turmoil last year, the UAE improved its ranking in AT Kearney??s 2012 Global Retail Development Index (a ranking of the top 30 developing countries for global retail expansion) from 8th to 7th. Zawya.com reports that while the world's largest developing markets ?" Brazil (1st), China (3rd) and India (5th) ?" still tempt the largest global retailers, the UAE, with its 12-million-square-foot Dubai Mall, one of the world??s largest, "is a market that few retailers can afford to ignore."

The news source writes that overall retail sales in the UAE increased by more than 5% last year as consumer confidence rose ?" despite the Arab Spring taking its toll on regional tourism ?" and the economy slowed down in the euro zone, according to the AT Kearney report.

The report also says that the trend is not limited to just Dubai Mall and other large formats. "One of the prime factors for the UAE's emergence as a retail hub is its 'open for business' culture, which encourages businesses to set up shop and reap the rewards of a growing economy, high consumption rates, a large urban population, and reduced political and financial risk."

Also, while the big box format is the popular choice for the UAE, consumers are also trending toward convenience stores, which is attracting a number of global players "and encouraging a number of local players" to move into the small format space.

"Convenience formats are becoming more popular in the UAE," notes the report. "Abu Dhabi-based LuLu Hypermarket Group is planning 50 neighborhood stores across the Gulf region over the next three years, and Carrefour is expanding its convenience stores across the country."

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