Retail trade in UAE to hit AED260 billion by 2021

ABU DHABI / WAM

The retail sector in the UAE is a significant mainstay of the domestic economy, with retail trade expected to secure a compound annual growth rate of 4.9 percent to hit AED260 billion by 2021, according to international forecasts.
The marked growth of this sector comes in coveted defiance of geopolitical tensions in the Middle East and the economic slowdown witnessed in the Gulf region, which is triggered by the fall in global oil prices over the past two years and the US dollar appreciation against other foreign currencies.
A report by the Emirates News Agency (WAM) attributes the noticeable growth experienced by the retail sector to a number of factors, primarily the purchasing power of nationals and residents alike in comparison with other peoples of the region, in additional to the widespread and intensive distribution reach of retail products across the nations, which lures leading global brands to have a foothold in the country, not to mention the highly advanced infrastructure enjoyed by the country and the robust legislation and regulations provided by the government to ensure an
investment-conducive environment – factors that have made this sector a significant enabler for economic growth in the country. “The UAE now boasts a much-coveted business destination in the world, and over the past few years the country
has turned to be a leading retail trade hub,” said Radhwa Radwan, an economic researcher, citing the country coming
7th globally and 1st regio-
nally on the 2016 Global Retail Development Index recently.
“The retail sector is now considered among the fastest growing economic platform in the country, which reflects the resounding success achieved by the non-oil sector in harmony with the UAE Vision 2021, which is premised to wean the national economy off oil.”
The economic expert cited in this respect the remarkable growth of non-oil foreign trade to US$ 416 billion in 2016 and the rise in retail sector contribution to the GDP to 11 percent in 2016 with an annual growth rate of 4.9 percent.
The economic analyst also cited the high ranking boasted by the UAE on the FDI Confidence Index 2016 where the country came 21st globally, with FDI inflows in 2014 and 2015 amounting to US$11 billion, and new investments in 2016 growing three times more than the previous year as a direct result of the launch of 129 new enterprises over the past three years.
“The robust retail sales through malls and shopping centres abundantly available across the nation in addition to the increasing tourist arrivals as a result of the diverse shopping events held nationwide all year around are other significant catalysts for retail trade in
the country,” said Ibrahim Al Ghitani, an economic researcher.
The marked growth of e-commerce which is gradually gaining consumer confidence across the country is another enabler, he said, signaling that e-purchases accounted for 3 percent of total sales across the country in 2016.
“The future abounds in promising growth prospects for the retail trade sector in the UAE, as local and international companies are expected to allocate more spaces for their retail business,” he said, expecting
the emirate of Dubai to see
additional 717,000 square metres of retail trade by the 2018 followed by Abu Dhabi to increase retail spaces by 467,000 square metres.