UAE vendors prepare for Retail Rush 2011

Retailers in the UAE are joining the retail parade with a positive 2010 and most expect 2011 to be a year of "strong growth" in Dubai and across the country.

"We expect that there should be a greater level of confidence in 2011 as the economy in general would have adjusted to current trading patterns and expect people to again begin spending, however, with caution not to create debt while doing so," Raymond Healy, General Manager, Shoe Mart UAE, told Emirates 24|7.

Both sales and income are up in 2010 compared with dismal 2009, retailers say, but companies are maintaining a cautious outlook. "We expected 2010 to continue to be a difficult trading year with no anticipated improvements to economic conditions. As such, we made adjustments for this and looked at opportunities to make a difference," Healy said.

Nevertheless, retailers such as Emax have more than doubled their sales targets for this year compared with last year.

"Our sales target for this year is reflective of our belief and confidence in the improvement of the market for 2010, with our target set to Dh650m, compared to total sales of Dh300m in 2009," Emax CEO Neelesh Bhatnagar told this website.

"[The year] 2008 and 2009 were both slow in terms of growth (as one would expect), however, from the fourth quarter of 2009 to the first quarter of 2010, [we] witnessed a 32 per cent growth in total sales, and even more positive business results are expected following the back-to-school, GITEX and Eid periods," he added.
Abu Dhabi and Northern Emirates have filled the gap created by a shortfall in Dubai's retail slowdown this year so far, but as the economy looks up, retailers expect Dubai to once again see stronger growth.

"Overall the retail sector performed in line with expectations. This meant stronger growth in markets such as Saudi Arabia and Qatar, as well as Abu Dhabi and the Northern Emirates. Other countries and Dubai were challenged with tourism downturn and consumer caution, but still grew somewhat," said Shuja H Jashanmal, CEO, Beautybay.

"For [us], the growth was in line with our expectations generally but Northern Emirates have surpassed these expectations. Next year, we expect stronger growth especially in Dubai as confidence is returning to the markets across all countries," Jashanmal added.

According to Emax' Bhatnagar, "following the global recession, what appears to be occurring now is a market correction. With the retail industry being one of the worst hit, the slow growth experienced in 2008 and 2009 was clearly no surprise, especially for electronics, which is often a litmus test to consumers spending habits, where items such as mobile phones and laptops for example are upgraded at much less regular intervals."

Nonetheless, 2010 has turned out to be much better for retailers. "[The year] 2010 is proving to be a much more positive year for the retail sector as all indications seem to suggest that the pace of recovery is speeding up," added Bhatnagar.

Despite many retailers reporting good sale number during shopping festivals and events, some say consumers are still holding back from making purchases and this continued even during DSF, the most important event in the shopping calendar of the city.

"DSF certainly created curiosity from residents and got them to come to our malls and stores (even though impact on sales was not up to expectations). Traditionally, DSF was big, with huge numbers of tourists flocking to Dubai just to shop. This is not the case today as these shoppers don't fly into Dubai in the numbers as we've seen in the past. DSF creates curiosity for residents and tourists from neighbouring emirates and GCC countries to see what's being offered to them by way of discounts or free gifts. Consumers are still somewhat reluctant to spend and do so only if big discounts are offered. Free gifts are not so interesting unless exclusive and have a very high value perception," elaborates Jashanmal of Beautybay.

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