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WARNING: Retail analysts agree that generic mega-malls may soon start losing out to more focused developments.

As the global retail industry suffers a slowdown in consumer spending, Gulf developers are building more shopping centres than ever before. Sara Hamdan reports on the regional retailing phenomenon that could be worth US$500bn by 2015.

The global retail industry is hurting. Declining consumer confidence is encouraging shoppers around the world to tighten their purse strings in anticipation of a slowdown.

But across the Gulf, the region's largest developers plan to pour billions of dollars into the industry as the surging price of crude oil helps to keep spending confidence high.

Retail spending figures made for depressing reading in April as sales fell across the largest economies in Europe, and sentiment among Japanese retailers fell for the second month running. That loss of confidence shows no sign of repeating itself in the Gulf, where there are plans to deliver around 150 new malls by 2015.

"The retail market overall is still underserved, especially if you look at the different segments where we have a lot of luxury consumption on top; over time, this will change and we will get more people coming in serving the mid-market," explains Anders Moberg, the CEO of the Majid Al Futtaim Group, the developer of projects that include Bahrain City Centre and Dubai's Mall of the Emirates.

But while brash mega-malls complete with ski slopes, ice rinks and water parks may characterise the current retail development craze in the Middle East, the next wave of development could be more about ‘niche' developments catering to particular tastes and products.

Retail analysts agree that generic mega-malls may soon start losing out to more focused developments.

"Instead of mixing low to high-end retailers all in one mall as used to be the case in the early days, the amount of retail space now available in Dubai means that malls can be individually positioned as single entities catering for a particular segment of the market or niche," says Simon Thomson, a consultant with UK-based Retail International.

Even some of the region's first shopping mall developments have repositioned themselves over the years as the retail market has matured, including Dubai's BurJuman Mall.

Initially, BurJuman only had a mid-range supermarket. Now it boasts an entire section for upper-end retailers including Etoile, Bvlgari and Chanel.

Consultant John Ibbotson of Retail Vision agrees that this market positioning is necessary.

"Most malls [in Dubai] are very similar with a basic offering of clothes and coffee," says Ibbotson, emphasising that a change in approach needs to take place as the market matures.

Gone are the blueprints for large-scale malls that cater to everyone and anyone.

Retailers are forging ahead with ambitious expansion plans by developing separate shopping malls that cater to the luxury market, the low-cost value market, mall concepts that target the large Indian expatriate community and others for the sizeable Chinese community - and any other niche group that is large enough to tap and attract investor interest.

The Majid Al Futtaim Group is planning to develop 30 distinct shopping malls by 2015, while the Nakheel group has an ambitious 100 retail ventures scheduled for completion within the same timeframe.

Nakheel, the UAE-based developer of the Palm and World islands, plans to invest billions of dollars in new mall concepts that will cater to all wallet sizes, as part of a strategy to ramp up its retail offering.

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