United Arab Emirates Retail Report Q4 2012
Business Monitor International, November 2012, Pages: 88
The UAE Retail Report examines the long-term potential of the local consumer market, but flags shortterm concerns about the impact on the UAE's economic outlook of lacklustre growth in the private nonhydrocarbon sector because of weak credit conditions.
The report examines how best to maximise returns in the UAE retail market while minimising investment risk, and also explores the impact of increased tensions between Iran and the West on the Dubai consumer in particular and on the ability of producers and exporters to realise returns in the short term.
The report also analyses the growth and risk management strategies being employed by the leading players in the UAE retail sector, as they seek to maximise the growth opportunities offered by the local market.
The UAE comes third (out of seven) in BMI's MEA Retail risk/reward ratings (RRRs).
Among all retail categories, over-the-counter (OTC) pharmaceuticals will be the outperformer through to 2016 in growth terms, with sales forecast to increase by nearly 46% between 2012 and 2016, from US$0.28bn to US$0.41bn as new population and healthcare spending data provide more commercial opportunities for companies in the industry.
In the competitive arena, BMI sees upside potential in the government's substantial investment in the healthcare sector, with large projects such as the Dubai Healthcare City and DuBiotech encouraging foreign direct investment (FDI).
Over the last quarter, BMI has revised the following forecasts/views:
- BMI expects economic activity in the UAE to slow through the latter months of 2012, and is forecasting real GDP growth of 2.9% this year, down from an estimated 4.2% in 2011. That said, recent data indicators show that the economy has weathered the ongoing global downturn relatively well, with the tourism and trade sectors likely to remain particularly bright spots over the coming months. BMI therefore expects growth to pick up to 3.5% in 2013.
- BMI believes that the weak state of the domestic banking sector and corresponding anaemic pace of credit expansion is set to undermine household consumption. According to latest data from the National Statistical Office, household spending expanded only 4.3% in 2011 (underperforming exports, imports and fixed capital formation), and we have pencilled in growth of 5.2% and 5.1% in 2012 and 2013 respectively.
- According to the Statistics Centre – Abu Dhabi (SCAD), per capita income reached US$85,850 in 2010. As such, locals have significant spending power, and the emirate's relatively young population are poised to ensure long-term growth for retail operators.
Executive Summary 5
SWOT Analysis 7
UAE Retail Business Environment SWOT 7
UAE Political SWOT 8
UAE Economic SWOT 9
Market Overview 10
Current Trends 17
Key Players 21
Industry Forecast Scenario 26
Consumer Outlook 26
Retail Growth Outlook 28
Table: Retail Sales Indicators, 2009-2016 28
Table: Retail Sales Breakdown By Key Segment, 2012f 32
Macroeconomic Outlook 33
Table: Economic Activity 35
Regional Retail Outlook 36
Table: Middle East And Africa Retail Trends, 2009-2016 36
Table: Middle East And Africa Regional Retail Sales, 2009-2016 (US$bn) 36
Table: Share Of Regional Retail Sales, 2009-2016 (%) 37
Current Trends 37
Risk/Reward Ratings 47
Middle East And Africa Risk/Reward Ratings 47
Table: Regional Retail Risk/Reward Ratings 48
The UAE's Retail Rating 48
Limits To Potential Returns 48
Risks To Realisation Of Returns 49
Mass Grocery Retail 50
UAE Mass Grocery Retail Industry SWOT 50
Market Overview 51
Industry Forecast Scenario 52
Table: Grocery Retail Sales By Format 53
Table: Mass Grocery Retail Sales – Historical Data & Forecasts 53
Industry Developments 54
Consumer Electronics 57
UAE Consumer Electronics Market SWOT 57
Market Overview 58
Computers 58
Table: Computers Demand, 2009-2016 58
AV Devices 63
Table: AV: Demand, 2009-2016 63
Mobile Handsets 67
Table: Mobile Handsets: Demand, 2009-2016 67
Industry Forecast Scenario 72
Consumer Electronics Market 72
Table: Consumer Electronics Overview2009-2016 72
Automotives 75
UAE Autos Industry SWOT 75
Industry Forecast Scenario 75
Table: UAE Automotive Sales 75
Table: UAE Automotive Trade 76
Table: Other Indicators 76
Passenger Cars 79
Demographic Outlook 82
Table: United Arab Emirates' Population By Age Group, 1990-2020 ('000) 83
Table: United Arab Emirates' Population By Age Group, 1990-2020 84
Table: United Arab Emirates' Key Population Ratios, 1990-2020 85
Table: United Arab Emirates' Rural And Urban Population, 1990-2020 85
BMI Methodology 86
How We Generate Our Industry Forecasts 86
Sources 87
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