GCC food spend seen rising to $106bn by 2017

  • Share via facebook
  • Tweet this
  • Bookmark and Share

Consumer spending in the GCC food retail sector is expected to reach $106bn in the next five years, according to a new report.

Food remains the largest segment of consumer expenditure in the region, standing at $83bn at year-end 2012 of the total $300bn, according to AT Kearney, the global management consultancy.

It said food accounts for 28 percent of the total consumers spend in 2012, with Saudi Arabia and the UAE together accounting for around 75 percent of the total food retail market in the GCC.

"While an exciting opportunity of $23bn exists, there are many changing dynamics in the grocery retail sector. Regional retail has experienced Hyper Speed evolution in past years growing very rapidly when compared to retailing in many mature economies such as the US and Europe," said Dr Martin Fabel, partner, AT Kearney.

He said retailers like Panda and Lulu have taken a third of the time to open 100 stores when compared to Western counterparts, such as Morrisons, Waitrose and Sainsburys.

AT Kearney said that while all food retail formats have witnessed solid growth, it is the larger sized stores, such as hypermarkets, which will dominate GCC market share over the next five years.

It said another area representing a large untapped opportunity for GCC retailers is the use of private labels.

Private labels in the GCC account for three percent of total sales compared to mature countries across the world where private labels have become an integral part of retailer's value proposition at 15-20 percent of sales.

Fabel added: "GCC food retailing is set for growth and offers a $23bn opportunity for the regional retail industry to leverage, but it will require players to move first, move fast and make the right move.

"Adopting a clear, differentiated strategy and implementing global best-practices to achieve sustainable competitiveness and growth is critical to overcome impending threats in the market, and capture a share of growth without losing market share and profitability."

Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

All comments are subject to approval before appearing

Further reading

Features & Analysis
In the lap of luxury: Ermenegildo Zegna's UAE ambitions

In the lap of luxury: Ermenegildo Zegna's UAE ambitions

Ermenegildo Zegna and Al Tayer Group are both respected family...

Focus: The impact of the Bahrain food subsidies row, what it means for the wider region

Focus: The impact of the Bahrain food subsidies row, what it means for the wider region

Sources also claim at least half the butchers in the island state...

Growth spurt for Gulf's e-commerce sector

Growth spurt for Gulf's e-commerce sector

The recent sale of Talabat.com to Germany’s Rocket Internet for...

Most Popular
Most Discussed