A recovery in Dubai’s shopping sector is not expected until after the first quarter of 2017, the head of one of the city’s largest retailers has warned.
Writing in this week’s issue of Arabian Business magazine, Lals Group boss Jayant Ganwani described 2015 as “one of the toughest years for UAE retail” and said that the “attrition in like-for-like sales has varied from moderate to severe” in the emirate.
Ganwani also said that he had not seen a bottom to the market, stating that the downturn had hit the luxury retail market especially hard.
Lals Group owns and operates two malls in Dubai – Lamcy Plaza in Oud Metha and Arabian Center in Mirdif – while it also has franchise rights for several major brands, including Homes R Us, Daiso and G2000.
“High-end brands have witnessed the steepest drop and, to different degrees, items of durable nature like automobiles and furniture,” Ganwani wrote.
“Food and basic necessities retailers such as hypermarkets have seen the lowest impact, but even in that segment customers are choosing to procrastinate purchases on non-food items, affecting the average transaction value and the margins these retailers make.”
Euromonitor International has projected that the value of the UAE’s retail market will be $53.7 billion in 2016, a 7 percent rise on last year. That figure represents a slight slowdown on the 8 percent growth in 2015 over 2014.
“Continued lower oil prices, regional disturbances, a stronger US dollar and low customer confidence all realistically translate into an unenthusiastic outlook for sales going forward,” Ganwani said.
“The best-case scenario is that sales hopefully flatten out in 2016. The burden is therefore on retailers to manage their businesses efficiently to ensure they are well prepared for the turnaround, which in our opinion will take place only after the first quarter of 2017.”retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.