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Mon 10 Sep 2012 05:14 PM

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Retail giants target Gulf for 'easy expansion'

International brands say Saudi, UAE and Qatar growth is among easiest in world to implement

Retail giants target Gulf for 'easy expansion'
Middle East shopping, Middle East retail, GCC retail

International retailers have voted the Middle East as one of the easiest regions in which to set up expansion plans abroad, according to a new index.

Saudi Arabia (8th), Qatar (11th) and the UAE (15th) all ranked highly in the first annual Retail International Programme Expansion (RIPE) Index, published by EC Harris.

The Gulf countries scored well for the quality of their transport infrastructure, capability of their construction supply chain and their supporting legal framework, the report said.

John Williams, regional leader, Middle East at EC Harris said: "International expansion presents great opportunities for retailers experiencing low growth in their domestic markets.

"Consumer appetite for luxury international brands is strong across the Middle East, and our report suggests that retailers are able to set up much more easily here than in markets such as China or India."

EC Harris said that particularly for brands positioned at the luxury end of the market, the Middle East presents "excellent opportunities to profit from the ease of delivery".

One brand that has already been successful is Bloomingdales which set up its first store outside the US in 2010, anchored in the Dubai Mall in partnership with Al Tayer.

The report predicted that future developments in the lead up to the Qatar 2022 World Cup were likely to present further opportunities for retailers as several major malls come to market such as the Doha Festival City.

The RIPE index ranks 40 international retail markets according to the five key factors that have a major impact on retail expansion success including the quality of infrastructure, quality and quantity of the construction supply chain, property capability, legal framework and business environment.

According to the research, Western markets such as Germany, the United Kingdom and Canada are the easiest for retailers to expand into, largely down to factors such as their open business environment, mature property capability and the availability of prime shopping locations.

The index comes hot on the heels of a report by Barclays which said two thirds of British retailers (66 percent) expected their overseas sales to increase over the next five years and ranked the Middle East fifth highest as their preferred future destination.

The UAE (7.7 percent) and Egypt (2.6 percent) were listed as the most popular countries within the MENA region.

Nearly a quarter (23 percent) of retailers said Germany was their number one choice for overseas expansion in the next five years, closely followed by China and Australia.

The MENA region matched the USA's ranking as a key market for expansion, Barclays said.

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