United Arab Emirates Retail Report Q4 2012

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.

Table of contents

Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

UAE Retail Business Environment SWOT

UAE Political SWOT

UAE Economic SWOT

Chapter 3 - Market Overview

Current Trends

Key Players

Chapter 4 - Industry Forecast Scenario

Consumer Outlook

Retail Growth Outlook

Table: Retail Sales Indicators, -

Table: Retail Sales Breakdown By Key Segment, f

Chapter 5 - Macroeconomic Outlook

Table: Economic Activity

Chapter 6 - Regional Retail Outlook

Table: Middle East And Africa Retail Trends, -

Table: Middle East And Africa Regional Retail Sales, - (US$bn)

Table: Share Of Regional Retail Sales, - (%)

Current Trends

Chapter 7 - Risk/Reward Ratings

Middle East And Africa Risk/Reward Ratings

Table: Regional Retail Risk/Reward Ratings

The UAE's Retail Rating

Limits To Potential Returns

Risks To Realisation Of Returns

Chapter 8 - Mass Grocery Retail

UAE Mass Grocery Retail Industry SWOT

Market Overview

Industry Forecast Scenario

Table: Grocery Retail Sales By Format

Table: Mass Grocery Retail Sales – Historical Data & Forecasts

Industry Developments

Chapter 9 - Consumer Electronics

UAE Consumer Electronics Market SWOT

Market Overview

Computers

Table: Computers Demand, -

AV Devices

Table: AV: Demand, -

Mobile Handsets

Table: Mobile Handsets: Demand, -

Industry Forecast Scenario

Consumer Electronics Market

Table: Consumer Electronics Overview-

Chapter 10 - Automotives

UAE Autos Industry SWOT

Industry Forecast Scenario

Table: UAE Automotive Sales

Table: UAE Automotive Trade

Table: Other Indicators

Passenger Cars

Chapter 11 - Demographic Outlook

Table: United Arab Emirates' Population By Age Group, - (')

Table: United Arab Emirates' Population By Age Group, -

Table: United Arab Emirates' Key Population Ratios, -

Table: United Arab Emirates' Rural And Urban Population, -

Chapter 12 - BMI Methodology

How We Generate Our Industry Forecasts

Sources

Related research categories

By sector: Retail (in Off-trade)

By market: United Arab Emirates (in Asia)