Gap narrows between Dubai and London for top retail destination

Dubai, which retained its position as the second most important international shopping destination globally for the fifth consecutive year in 2016, is growing at a fast pace and can achieve the status of world’s top retail destination next year as the gap between Dubai and the first-ranked London is narrowing fast.

According to global property advisor firm CBRE’s statement issued on Tuesday, Dubai has presence of 57 per cent of international retailers, second to London at 57.9 per cent.

When compared with last year, Dubai had a presence of 55.7 per cent of international retailers while London was at 57.9 per cent – meaning that the gap between the two cities is narrowing at a fast pace and the emirate could dethrone London from the top slot next year if continued to grow faster that The City.

The 2016 edition of the ‘How Global is the Business of Retail?’ by CBRE showed during the course of 2015, Dubai attracted 38 new international brands, with high profile retailers including All Saints and Old Navy.

The majority of the brands in Dubai originate from Europe (62.6 percent) and the US (60.6 per cent), with a lesser number from Asia and the Middle East; potentially attributed to the economic situation in the home markets.

Markedly, Abu Dhabi featured high on the list of European and APAC retailers, with 40.6 per cent and 11.8 per cent of retailers in the market in 2015 respectively.

Compared to European and American retailers, APAC retailers continue to be less focused on expansion outside their own region. With many retailers from the continent preferring to concentrate on the growth at home. However, Dubai was once again the most infiltrated city by a large and growing margin, with 23.5 per cent of all APAC brands present in the city.

Other Middle Eastern cities are also popular destinations for APAC retailers with Abu Dhabi, Kuwait City and Doha all in the top five.

Nick Maclean, Managing Director, CBRE Middle East, said: “Dubai’s global connectivity and stature as hub for trade between the East and West has clearly given an impetus in the retail sector. Over the last decade, the Emirate has established itself as a globally recognised retail tourism destination, attracting millions of visitors from across the globe each year. The Emirate has become synonymous with retailing and home to many of the world’s prestigious and coveted brands. Dubai has cemented its position as the location of choice for international brands looking to enter the region and widen their footprint to rollout their brands and concept stores.”

“Abu Dhabi is growing its footprint with key international retailers. We see more luxurious schemes coming into the capital making Abu Dhabi more complimentary to the Dubai market. As consumer spending continues to grow, driven by population growth and increased tourism arrivals, Abu Dhabi showcases a promising leisure offering,” said Maclean.

Food and beverages

Dubai’s food and beverages (F&B) market has been a key focus in recent years, and continues to attract significant interest from both international and home grown restaurant brands, with Din Tai Fung and Five Guys recently opening their doors to the public.

According to CBRE’s F&B report released last month, UAE residents ranked as third biggest F&B spenders, positioning the outlook for the F&B sector as positive as it continues to see significant spending on socalising and eating out, generated by UAE nationals and expatriates alike.

Hamad Buamim, President & CEO, Dubai Chamber of Commerce & Industry, said, “Dubai’s truly global makeup of residents from over 200 nationalities give the emirate a distinct flavour and make it particularly receptive to the establishment of brands from all over the world, across F&B and merchandise. Dubai has drawn the best-in-class retail houses with its business friendly atmosphere, ease and efficiency of doing business, and its safe, family-friendly and multicultural environment.”

Buamim emphasised that Dubai offers advanced infrastructure for retail businesses, and is a gateway to the wider GCC and Mena region through which brands can easily enter. “Retail constitutes nearly a third of Dubai’s GDP, and we expect the industry to continue showing strong growth in the coming years,” he said.

Mid-range fashion retailers remained the most active sector globally. Retailers from the Americas have been the most expansive in the recent years and this trend continued in 2015, with brands from this region targeting major markets such as Dubai, Zurich and New Delhi.

Rajiv Suri, Chief Executive Officer, Majid Al Futtaim Fashion, said ,”In the current economic climate, the luxury sector has softened, whilst the mid-range fashion and value sectors are key sectors to develop as retailers extend their footprint outside of the UAE. Majid Al Futtaim Fashion’s focus remains unchanged, creating great moments for everyone every day, delivered through improved in-store events and activities to engage consumers.

“We’ve been working on forming new collaborations which underlines our commitment to identifying new brand opportunities, and establishing partnerships with significant investment, proving our dedication to the long-term success of brands. The recent Mall of the Emirates extension is a great reflection and indicator of our reputation in the market, where we were the first ever international partners for brands from the Americas like Abercrombie & Fitch, and lululemon athletica, and other international retailers like AllSaints.”

The traditional retail triumvirate of London, Paris and New York continue to be challenged and in some cases overtaken by cities from Asia Pacific and the Middle East. This trend is likely to continue and there will be a day when we see a new number one atop the overall retail penetration rankings.

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