By Neeraj Gangal
UAE rises 16 places to 4th position in the 2009 Global Retail Development Index.
While Dubai has recently been synonymous with retail expansion, Abu Dhabi is the rising star of the UAE, according to a study.The UAE has made the biggest move in the 2009 Global Retail Development Index (GRDI), a study of retail investment attractiveness among 30 emerging markets.
It has risen 16 places to fourth position as its oil-driven economy proved more resistant to widespread downturn than other countries, according to global management consulting firm AT Kearney’s eighth annual GRDI study.
For the fourth time in five years, India has emerged as the most attractive country for retail investment according to the Index. Russia, China, the UAE, Saudi Arabia, Vietnam, Chile, Brazil, Slovenia and Malaysia round out the GRDI’s 2009 top ten countries.
The report noted that while the UAE’s population of five million is relatively small compared to the three countries above it in the GRDI, it has the highest per capita consumer spending of any country in the Index.
In fact, Dubai is on track to have the world’s largest amount of shopping space per capita by 2010. Retailers in Dubai are focusing on local customers as tourism drops and that is creating entry opportunities for hypermarkets and discounters, AT Kearney said in its news release.
Yet while Dubai has recently been synonymous with retail expansion, Abu Dhabi is the rising star of the Emirates according to the study. It has remained well insulated from the global economic crisis because of its oil reserves and sovereign wealth fund. Several new museums and a Formula One race are planned and will help it attract tourists, the report said.
Immigration is also expected to pick up as Abu Dhabi becomes a nearby alternative to Dubai. New city developments will increase real estate supply and strong awareness of global brands among the population will provide opportunities for foreign retailers.
The current downturn has increased emerging market opportunities for global retailers, the study noted.
“With economic conditions in developed markets improving so slowly, emerging markets are becoming much more important sources of growth for global retailers,” said Hana Ben-Shabat, AT Kearney partner and co-leader of the study. “Leading global retailers must develop a portfolio strategy that balances big and developed markets with small and developing markets to manage risks across the globe.”
Published since 2001, the GRDI helps retailers prioritize their global development strategies by ranking the retail expansion attractiveness of emerging countries based on a set of 25 variables including economic and political risk, retail market attractiveness, retail saturation levels, and the difference between gross domestic product growth and retail growth.
“Countries throughout Asia are well positioned for an early recovery from the economic crisis as domestic demand is holding up well, GDP growth continues and trillions of dollars of sovereign reserves are providing governments and state banks with tools for action,” said Michael Moriarty, another AT Kearney partner and co-leader of the study. “Asian countries continue to transform their economies with domestic consumption as a primary focus – a trend that should favour continued growth in retail over the long term.”
A detailed analysis and country-specific results for the 2009 GRDI is available at www.grdi.atkearney.com .
No particular surprise here about the UAE's rampant materialism appearing to be relatively unabated even in the downturn at least in comparison to other areas. Also with the lack of hard numbers in this article one could posit that its more of the case of a object as other remaining more or less stationary as others plummet rather than any dramatic increase propelling the UAE upwards.