While Dubai Shopping Festival might not be focused primarily on the FMCG sector, it certainly draws attention to the rapid development of the retail sector in the region. Many retailers and developers use the 45-day festival as a platform to announce new plans, the culmination of investments and other developments.
For example, Dubai Festival City, an ambitious development on the edge of Dubai creek recently announced the opening of Dubai Festival Waterfront, with a vast retail offering including the biggest Marks & Spencer’s store outside of the UK. The total retail area of DFC, when completed, will span about 2.1 million sq ft.
The Dubai Mall project, which is due for completion next year, will also no doubt figure highly in Dubai Shopping Festival in the future. The project will include a mall covering five million sq ft, making it the largest retail space in the world. Furthermore, the mall is expected to attract a staggering 35 million visitors in its first year alone.
With Dubai also home to numerous other malls and retail developments, industry insiders are increasingly questioning just how much capacity remains in the market. For example, Phil McArthur, managing director, shopping centres and commercial real estate for the Al-Futtaim Group – which is behind Dubai Festival City – thinks that the amount of retail space could outstrip supply in the next few years.
This situation is likely to see the more outdated centres suffer, with the larger and more modern projects – such as Dubai Festival City – taking the biggest slice of consumer shopping hours. McArthur also thinks that, given the number and scale of developments going on together with the city’s existing retail space, some of the projects being mooted may not even see the light of day.
All of this is important for hypermarket and supermarket groups, which have become an integral part of most shopping malls. Supermarkets in some of the cities older malls could see their customer base dwindle as newer developments appear. And of course, some of the bigger supermarket groups should also question the positioning of new projects, as it looks like not all will come to fruition.
Follow us on
