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Promising numbers: According to a new report from Alpen Capital, the size of the GCC’s retail sector is projected to grow at a compound annual growth rate (CAGR) of 4 percent, from $253.2 billion in 2018 to $308 billion 2023. Retail sales are under pressure, but are forecast to recover. hrough 2023.
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UAE leads the way: Over the forecast period, the annualised growth in retail sales in the GCC ranges from 2.2 percent to 5.1 percent. The UAE is expected to lead the way at 5.1 percent, followed by Kuwait at 4.2 percent. Growth in Saudi Arabia is forecast at 3.3 percent.
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Coming oversupply: An influx of additional retail space in the UAE may create an oversupply situation and drive down rents across the market. Figures show that, 5.2 million additional square metres of retail space is expected to come up by 2023. The oversupply may also lead to project delays.
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Changing consumers: Changing consumer preferences and the rising adoption of e-commerce platforms are rapidly transforming the region’s retail landscape. Among the changes expected are an increased adoption of AI technology, augmented and virtual reality.
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Strong fundamentals: The growth in retail sales is expected to be driven by strong fundamentals in the region, including an increase in population, a rise in GDP per capita and an influx of tourists. These factors will be aided by a recovery in oil prices and government infrastructure projects.