A boost in the economy and rising expat wealth should cause retail sales to hit Dh 97 billion by 2014, including automotive, consumer electronics and pharmaceutical sales.
As the economy grows stronger, household consumptions climb, urbanization spreads and expatriates become wealthier the retail sales figures for the UAE are expected to jump nearly 30 per cent in the coming years, reaching Dh 97 billion by 2014.
Forecasts coming from Business Monitor International (BMI) see the UAE’s retail sales figures climb from the 2010 total of Dh 75.05 billion up to Dh 97 billion by 2014. Most of the increase is expected to occur in automobiles, food and over-the-counter medications.
A recent study by RNCOS indicated that the expatriate population in the UAE is responsible for the main portion of this increase, although the nationals have a role in retail sales. RNCOS is a research firm out of India.
The BMI projections show that over-the-counter medication sales are expected to see major growth over the next four years, climbing almost 49 per cent from $480 million in sales for 2010 up to $420 million by 2014 (Dh 1.541 billion).
As disposable income levels increase in the UAE the market for luxury vehicles climbs with it. Automobile sales are expected to jump almost 34 per cent by 2014, rising from $11.56 billion this year to $15.45 billion in four years.
The consumer electronics retail market is also projected to increase over 27 per cent, from $3.07 billion in sales this year to $3.91 billion over the next four years.
The UAE has one of biggest consumer-grade electronics markets in the Gulf region and services nearly 2 billion customers across the Mideast and Asian regions. It accounts for almost 40 per cent of regional spending.
Food is another market that is expected to see an increase. Currently sitting at almost $7.13 billion in sales, this market should rise 18.4 per cent to $8.44 billion by 2014. The mass grocery retail (or MGR) in the UAE is the most sizable by value in the Gulf region. The 2010 sales figures for the MGR are $4.92 billion and account for a 69 per cent portion of the whole food/drink market. This value is expected to climb up to $6.92 billion by 2014 and will then make up 82 per cent of the total food/drink market.
Retail sales for 2010 in the local group of MEA nations (Middle East and African) are expected to reach $183.2 billion, taking into account the various definitions within the nations. According to BMI figures, consumer spending increased even though there were recent difficulties in Dubai and mainly due to strong growth in the economy, rising household consumptions, growing expat wealth and more widespread acceptance of the retail concepts of today.
Spreading urbanization is also contributing to growth in the retail sector. Abu Dhabi is an urban center that is predicted to see population increase to 1.3 million between now and 2013, according to the UPC (or Urban Planning Council).
Currently the UAE has a 10.3 per cent share of the total retail sales in MEA, but BMI is forecasting that share will shrink to only 10.1 per cent.
Nominal GDP in the UAE for this year should hit $286.75 billion, up five per cent due to economic recovery after a decline in 2009 of three per cent. BMI figures forecast that the GDP will grow an average of 4.1 per cent annually from this year until 2014. As the population rises to 5.1 million over the next four years, up from current figures of 4.7 million, the GDP per capita should increase to $72,631 (US$) by 2014.
Currently the per annum household spending power for UAE residents is $14,400 on average. According to figures by Colliers International property consultants, households of the Emirati take up a majority of these spending amounts, $23,000 on average. Other households, including westerners, Asians and Arabs, have spending levels of $19,500, $10,000 and $13,500 respectively.Paul Holdsworth, Staff Writer, Gulf Jobs Market News