Oman is captioning attention for global retailers
Oman, the new entrant and ranked 8, is among the four GCC countries which finds place in the top 20 in the A.T. Kearney's 2012 index of top ranked emerging markets for global expansion in the retail sector. The other three Gulf states include UAE (7), Kuwait (12), and Saudi Arabia (14) In the 12th Global Retail Development Index (GRDI), four GCC countries rank in the top 20.
Globally, Brazil retains the number 1 position for the second year in a row and as Chile (2) and China (3) climb, India (5) drops down one place, according to A.T. Kearney, a global management consultancy. "We are seeing GCC retailers grow exponentially. Some have reached their 100th store opening milestone in a third of the time compared to developed markets and some are experiencing growth rates 3-4 times faster than their mature peers - we call it hyper-speed evolution," said Dr Martin Fabel, partner and head of Consumer Industry and Retail Practice, A. T. Kearney Middle East. Oman makes it first time appearance in the GRDI ranking in the top ten.
Highlighted in the global study as a 'small gem', Oman represents an attractive destination for global retailers, particularly for specialty and luxury players. Although small in terms of total retail market size its strong fundamentals and concentrated wealth represent appeal to retailers seeking first mover advantage in fast-growing markets. The high-level entry ranking reflects its growing mass grocery, electronic and luxury goods segments. The UAE's upward move on the index, from 8 to 7, reflects strong consumer confidence and increasing retail sales of over 5 percent.
Tourism has always been an important retail growth factor for the UAE and while the Arab Spring and global economic slowdown is taking its toll on some markets, the country has enjoyed strong visitor number levels, along with its reputation as a safe and welcoming nation, accepted by both tourists and investors alike. Dubai Mall is the world's most-visited shopping and leisure destination. With over 54 million visitors (up 15 percent from 2010) and a 35 percent increase in average sales, the one-million square feet expansion plan reflects growing interest by international retailers.
Similarly, Mall of the Emirates, the country's second largest mall, had its best performance in 2011. Nevertheless, the report says that while convenience formats present growth paths for retailers looking to expand their local footprint, large hypermarkets continue to announce plans for neighbourhood store expansion across the Gulf region. Kuwait's concentrated urbanisation - 98 percent of citizens living in cities-demonstrates a strong loyal luxury fashion consumer set.
The country's projected retail sales increase of $4 billion from 2011 to 2015 is indicative of the growing interest by new international brands. The Avenues Mall is Kuwait's largest shopping centre featuring the largest number of international brands in the country with two new malls in the pipeline including; 360 Kuwait with over 800,000 square feet of retail space, and Mall of Kuwait with over 1.6 million square feet. Saudi's strong fundamentals of rising GDP, population growth and increased government spending solidifies its position in the top 20 maintaining its standing as among the largest and most attractive markets in the Middle East.
Several international brands have announced expansion plans to capture the anticipated increase in Saudi consumer spend in parallel with the government stimulus plan to inject about $110 billion into the economy over the next five years.