Retailers in the Gulf Cooperation Council region are reporting higher turnovers due to rising inflation and consumers spending more on basics, according to investment banking advisory firm Alpen Capital.
The GCC’s retail industry is expected to increase by 15.7% annually, reaching $296.8 billion in revenue in 2022, with the period surrounding the FIFA World Cup 2022 in Qatar driving growth by 36% annually.
To reach $370 billion by 2026, Alpen Capital anticipates a compound annual growth rate of 5.7%. After the World Cup, growth is expected to moderate at a CAGR of 3.5%, but Qatar will still see the fastest growth in the area in 2022, with sales projected to reach $18.5 billion.
According to the report, the expansion will be aided by favorable demographics, improving macroeconomic conditions, a resurgence in tourism, government efforts to diversify the economy, and a rise in the popularity of brick-and-mortar and online retailers.
“The industry was severely hit by the restrictions imposed during the pandemic; however, retailers were responsive to the changing demands and innovated to sail through difficult times,” said Sameena Ahmad, managing director of corporate affairs at Alpen Capital.
“There is an urgent need for retailers to upscale their digital presence to stay relevant and compete with regional and international players,” Ahmad added.
Due to their huge and diversified populations, liberalized regulations, and growing need for distinctive shopping experiences, Saudi Arabia and the UAE will account for 78.5% of all regional sales by 2026, according to the report.
Between 2022 and 2026, Alpen predicted retail sales in the UAE and the kingdom would increase at a CAGR of 5.1% and 6.5%, respectively. During the projected period, Bahrain, Oman, and Kuwait are anticipated to grow at a CAGR of 7.3%, 6.1%, and 3.5%, respectively.
Fast Company’s World Changing Ideas comes to the Middle East on 23 November 2022. Click here to know more.
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