GCC Will Witness Retail Sales Increase up to $297 Billion Thanks to the UAE and Saudi Arabia

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The GCC’s Retail Sales Increase In 2022

According to Alpen Capital’s most recent study, the GCC’s retail sales increase would reach $296.8 billion by the end of 2022, driven by a booming retail sector in the UAE and Saudi Arabia.

Factors That Contributed to The GCC’s Retail Sales Increase

Alpen Capital’s latest report on the GCC’s retail sales increase said that the rise in hydrocarbon revenues and the rise in business confidence after the reopening of borders, easing travel restrictions, and return of business confidence are significant factors that contributed a great role in helping the retail industry.

The GCC is quickly becoming a central hub for international business, entertainment, and athletic events, and many events are planned to increase traveller numbers. Additionally, one of the key drivers propelling the expansion of the GCC retail business continues to be the expanding population, which includes a large proportion of expatriates and HNWIs.

According to a report presented at the Middle East Retail Forum, the recently concluded free trade agreements (FTAs) with India and Israel will expand the establishment of foreign brands in the region and broaden the variety of foreign products (food and non-food) available in domestic retail stores.

Annual Growth of Retail Sales

Retail sales increase in the area is predicted to rise at a compound annual growth rate (CAGR) of 5.7% to $370 billion in 2026, with the UAE accounting for $113.8 billion and Saudi Arabia contributing $176.5 billion, according to the analysis from the UAE-based investment banking advisory firm.

Retail Sector Anticipations

The GCC retail sector is anticipated to expand at a healthy rate due to favourable demographics, better macroeconomic conditions, and a rebound in the travel and tourism sector. According to the research, the government’s aim for economic diversification and the rising popularity of omnichannel business models are also anticipated to be positive factors for the industry.

According to Krishna Dhanak, managing director of Alpen Capital (ME) Limited, the region’s retail market is shifting due to the pandemic’s effects on customer behaviour and purchasing trends, which has elevated e-commerce to the forefront of the business.

According to Dhanak, Operators have moved their attention to brand acquisition to increase their regional reach and broaden and vary their product offerings. Larger e-commerce giants will probably buy specialist businesses that provide specialised goods and services. They anticipate further industry consolidation in the coming years to boost profits, gain market share, and enhance operational effectiveness.

Between 2022 and 2026, it is expected that non-food retail sales increase will grow at a CAGR of 6.2% while food retail sales will rise at an annualised pace of 4.9%.

Saudi Arabia And The UAE Retail Sales Increase

Saudi Arabia and the UAE continue to dominate regional retail sales, accounting for 78.5% of all sales by 2026; this is partly because of their sizable and diversified population, rules that have been liberalised, and a growing desire for unusual shopping opportunities. Between 2022 and 2026, retail sales are expected to increase in the kingdom and the UAE at a CAGR of 6.5% and 5.1%, respectively.

Retail Sales In Qatar, Bahrain, Oman, and Kuwait

As a result of the inflow of visitors for the Fifa World Cup 2022, Qatar is anticipated to have the most significant growth in the area during 2022, with retail sales likely to increase by 36% year over year to reach $18.5 billion. The CAGR for growth is predicted to return to its pre-World Cup level of 3.5% after the tournament.

During the projected period, Bahrain, Oman, and Kuwait are anticipated to increase at CAGRs of 7.3%, 6.1%, and 3.5%, respectively.