Tourists and residents spent 5% more on shopping in the emirates last year, making it one of the top markets in the world
The GCC continues to show strength as a dynamic retail market with four countries ranked among the top 25 in the 2014 AT Kearney Global Retail Development Index (GRDI).
Factors influencing the growth of the regional retail industry include the construction and infrastructure boom, a growing and young population, strong GDP growth, and increasing consumer confidence and spending, AT Kearney said.
The UAE, Kuwait, Saudi Arabia and Oman were all prominent in this year's list with the UAE climbing one spot to claim fourth position.
Retail sales grew five percent in the UAE in 2013, boosting annual sales to $66bn, AT Kearney noted.
It added that Dubai’s winning bid for Expo 2020 "highlights the country’s bright future and the massive infrastructure and development projects in the pipeline".
Kuwait also climbed one spot to rank eighth in this year’s index.
"The country’s rapidly growing GDP makes it a strong retail market, with high oil prices, strong trade and fiscal surpluses, and large government reserves creating a positive outlook," the index said.
The index added that Saudi Arabia continued to remain "fundamentally attractive" to retailers looking to expand, and maintained 16th spot in this year’s GRDI.
The kingdom has the largest economy in the Gulf region and remains largely untapped by modern retail. However, hypermarkets and large shopping centers are expanding.
In Oman, retail sales have grown seven percent per year since 2011 and the grocery sector leads the growth. Despite its small population of 3 million people, Oman ranked 17th in the 2014 GRDI.
Commenting on the index findings, Dr Martin Fabel, partner and head of Consumer Industry and Retail Practice at AT Kearney Middle East, said: “The GCC retail sector continues to be considered among the leading markets globally. As a rapidly maturing market, the UAE has a growing need for more sophisticated formats to cater to changing consumer needs.
"Consumers are demanding more proximity and retail saturation has brought about some interesting and innovative concepts. In Kuwait, as a top luxury destination, high-end retail developments were the main drivers for market growth.”
“Retailers in Saudi Arabia have the opportunity to deliver creative formats and entertainment in addition to their current offerings. Grocery is the Kingdom’s largest retail sector, and although hypermarkets will continue to spread, small convenience stores will remain important.
"Despite its small size, Oman’s solid economy, increasing consumer confidence, and recent government moves to improve access to credit makes it a popular growth location for regional and global players,” added Fabel.
Globally, Chile, China and Uruguay were named the top three countries, ahead of the UAE. Latin America remained a strong retail market with eight countries — Chile, Uruguay, Brazil, Peru, Panama, Colombia, Costa Rica, and Mexico — included in the 2014 list.
Published since 2001, the GRDI ranks the top 30 developing countries for retail investment worldwide.