(MENAFN- Khaleej Times) Dubai - GCC retail sales are expected to grow at a 7.3 per cent compound annual growth rate (CAGR) between 2013 and 2018 to reach $284.5 billion, according to Alpen Capital.
In its 'GCC Retail Industry' report, Alpen Capital also announced that sales of supermarket and hypermarkets in the GCC are expected to reach $59.3 billion, translating into a five-year CAGR of 9.2 per cent. This growth is expected to be driven by increasing disposable incomes and modernisation of the industry.GCC retail sector on growth path
Detailing a perspective on the retail industry, the report states major market characteristics and the changing dynamics of the industry. The report examines sub-segments of the retail market by analysing the fundamental growth drivers and significant challenges and developments. The report also profiles some of the big names in the retail industry of countries in the region.
"The retail industry continues to maintain a positive momentum attributed to key factors influencing the market like robust economic growth, rising purchasing power, growing population comprising a large proportion of expatriates, changing consumption patterns and increasing penetration of international retail players.
"The retail structure in the GCC region is undergoing significant transformation, driven by the social and economic developments that has resulted in an increase in modern retail formats such as hypermarkets and supermarkets," said Sameena Ahmad, managing director of Alpen Capital.
"Socio-political stability coupled with the government initiatives directed at increasing economic diversification is creating a positive environment for investors in the GCC. The M&A activity in the sector has picked up pace in recent times. In recent years, several deals have taken place in the sector that involved some of the region's leading retailers including the Savola Group, Damas International, LuLu Group, and Al Meera Consumer Goods Co," said Mahboob Murshed, managing director, Alpen Capital.
Deloitte's 18th annual 'Global Powers of Retailing' report also revealed that the top 250 global retailers generated revenues of $4.4 trillion in the fiscal year 2013, each with an average size of more than $17.4 billion.
GCC retail sector on growth pathRevenue growth for the top 250 retailers, which began declining in 2011, continued to slow in fiscal year 2013. While growth continued to decline, nearly 80 per cent of the top 250 (199 companies) posted an increase in retail revenue in fiscal year 2013.
"The sluggish global economy in 2014 left many consumers financially constrained and retail sales under pressure. Thus, the prosperity of the global retail sector in 2015 will very much depend on the economic stability of several of the largest economies.
Despite the recent fall in oil prices, there is little evidence at this stage that it will negatively impact consumer spending in the Middle East. Although European grocers might be slowing expansion, no such problems are affecting those in the Middle East," said Herve Ballantyne, partner and consumer business leader at Deloitte Middle East.
"The 2015 Global Powers of Retailing report ranks Emke Group/Lulu Group as one of the best examples of Middle East retailers faring well globally. In 2014 alone, the retailer jumped an impressive 14 places from last year's ranking which showcases the company's growth in the region," noted Alfred Strolla, regional managing partner for Oman, and Yemen at Deloitte Middle East.
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