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Bahrain Retail Report Q1 2011
Business Monitor International, Jan 2011, Pages: 63
The Bahrain Retail Report provides industry professionals and strategists, corporate analysts, retail associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Bahrain's retail industry.
BMI’s Q111 Bahrain Retail Report forecasts that the country’s retail sales will grow from an expected BHD0.83bn (US$2.20bn) in 2011 to BHD1.12bn (US$2.97bn) by 2015. Key factors behind the forecast growth in Bahrain’s retail sales are an improving long-term economic outlook, growing interest in Western styles of retailing and a steady rise in disposable income.
Bahrain’s nominal GDP in 2011 is forecast to be US$33.57bn, with real GDP growth expected to struggle to hit 1.9% for the year as short-term economic difficulties persist. Average annual GDP growth of 5.9%is predicted by BMI between 2011 and 2014. With the population forecast to increase from an expected0.82mn in 2011 to 0.87mn by 2014, GDP per capita is predicted to rise to US$54,682.
Statistics from the Ministry of Culture and Information’s tourism affairs division show that tourist arrivals have risen by an average of 10-15% a year over the past three years. In 2007, Bahrain attracted 5.5mm tourists, 4.9mn of them from other Gulf Cooperation Council (GCC) member countries. Tourism arrivals are projected to rise by an average of 2.5% per annum over the next decade.
Bahrain’s retail market will also continue to benefit from events such as the annual Formula One grand prix in Sakhir, which has generated hundreds of millions of dollars in revenues since it became a fixtureon the racing calendar in 2004.
In 2005, 71.2% of the Bahraini population was described by the UN as economically active, with 40.7% in the 20-44 age range crucial for retail sales. In 2010, 72.7% of the population is expected to be economically active but the proportion of those in the 20-44 age band is forecast to fall to 39.9%.A very high level of urbanisation is contributing to a vibrant retail sector. In 2005, more than 90% of the population was classified by the UN as urban, and this is forecast to have risen to 91% in 2010. About 89% of the population live in the two principal cities of Manama and Muharraq.
Retail sub-sectors that are predicted to show strong growth over the forecast period include automotives, with sales forecast to rise by more than 12% during the forecast period, from an expected US$0.92bn in2011 to US$1.03bn by 2014. The luxury, high-end autos sector seems to be withstanding the economic downturn and showing signs of increasing sales as more stable economic market conditions return.With the Bahraini consumer electronics market well positioned to function as an electronics trading hub,particularly between India and the Far East, sales are predicted to increase from an expected US$0.46bnin 2011 to US$0.52bn by the end of the forecast period, a rise of nearly 14%.
We estimate that food will account for 24.1% of total retail sales and be worth US$0.53bn in Bahrain in 2011. This is forecast to decrease to 19.0% of overall retail sales by 2014 as non-food retail sales rise.The mass grocery retail (MGR) sector is estimated to post sales of US$0.52bn in 2011, representing90.6% of the total food market. With consumers increasingly favouring modern retailing, BMI expects the value of the MGR sector to rise to US$0.70bn by 2014.
Retail sales for our set of Middle East and Africa (MEA) countries in 2011 are predicted to amount to US$196.69bn, based on the varying national definitions. Total consumer spending for the region based on BMI macroeconomic database is forecast at US$722.41bn. In 2011, BMI predicts that South Africa and Israel will together account for an estimated 56.8% of regional retail sales, and their combined share is expected to rise to 57.2% by 2014. For Bahrain, its estimated 2011 market share of 0.8% is expected to decrease to 0.6% by 2014
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