GCC retail sales set to touch $300-bn

The annual retail sales in the GCC are expected to touch the $300-billion mark by 2028, according to Strategy&. The estimation doesn’t seem far off from Euromonitor International’s calculation that indicates the market to surpass $280 billion by 2028.

Among factors fuelling growth of the GCC retail markets are economic diversification strategies to accelerate the growth of non-oil GDP, influx of new brands and investments, remarkable growth in tourism and a rise in the ‘employed’ segment of the population, among others.

For perspective, according to EMI, women’s share in the GCC’s ‘employed’ population is anticipated to grow from under-16% in 2018 to 20% by 2028. The Kingdom of Saudi Arabia is expected to lead as it aims for 30% women in the workforce by 2030. As a result, increase in disposable income is expected to boost consumer spending.  

Are all roads pointing towards the GCC?

Based on recent announcements, it certainly seems like it. Here’s a quick look at a few major announcements in recent months.

• The global first Nysaa store – a joint venture partnership between regional retail conglomerate Apparel Group and India’s leading omnichannel beauty platform Nykaa – opened in City Centre Mirdif in June.
• Regional off-price retailer Brands For Less (BFL) Group has signed a strategic agreement with global off-price major TJX Companies to sell 35% stake as part of a deal that values BFL Group at an enterprise value of $1.2 billion.
• Popular American food chain Chipotle has entered the Middle East in partnership with Kuwait headquartered regional retail conglomerate Alshaya Group, opening its first outlet in Kuwait to be followed by an impending branch in Dubai.

Food landscape is set to “explode”

Staying with food, the landscape with its myriad flavours not only tickles tastebuds but has been attracting considerable investments as well.

If anything, the food landscape is set to “explode,” stated Muralikumar, Chairman of Chandramari Group and Founder of Indian restaurant Zordaar, a new entrant into the UAE’s rich foodie landscape.

Chandramari Group invested AED5 million on the first outlet of Zordaar, which opened in Dubai earlier this month in Millennium Hotel, Al Barsha. The plan is to invest an additional AED20 million to open six-seven outlets of Zordaar across the UAE before expanding into other GCC markets including Saudi Arabia, Qatar and Bahrain.

That’s not all. Chandramari Group plans to invest AED15-20 million more to introduce two new restaurant brands offering Lebanese and global vegetarian cuisine. The first outlet of the vegetarian cuisine restaurant will open in Mankhool, Dubai and will involve an investment of AED9.5 million.

While these are encouraging signs, food service is a rather crowded and difficult sector to operate in. How soon does Chandramari Group expect to breakeven on each of these restaurants? “We expect the vegetarian restaurant to breakeven within a year. The other two restaurants might take up to 2.5 years,” Muralikumar responded.