Consumer spending in the UAE rose nine per cent last year and the emirate recorded highest clothing sales per capita in the world, according to a report by global consultancy firm.
AT Kearney’s Retail Apparel Index showed that the UAE had the highest clothing sales per capita at $785 in 2010.
The UAE was ranked as second most attractive market for apparel retailers after South Africa.
Overall, the UAE saw its ranking dropping two slots to ninth at AT Kearney’s Global Retail Development Index for most of the international retailers have presence here thus becoming an increasingly saturated market.
Highlighting increased consumer spending, AT Kearney analysts said that tourism, sizable household consumption and ample retail space were the key drivers.
For many retailers, the UAE remains the preferred entry point into Mena for new products and brands. In 2010, Bloomingdale’s opened its first store outside the US in Dubai and Victoria’s Secret opened its first store in the region through a partnership with MH Alshaya.
“Consumer spending grew a healthy nine per cent last year, a good indicator of consumers’ stabilising confidence. Overall, however, consumers remain cautious with discretionary spending and, compared to pre-crisis years, have a greater propensity to save. Prices are rising faster than wages and many consumers are feeling their purchasing power declining,” AT Kearney report said.
It said the economic downturn gave UAE retailers pause for thought. Until recently, many of them established outlets in whatever mall space was available, failed to consider the market position, adjacent facilities or store location within the mall, and as a consequence paid the price. Now, retailers are paying more attention to consumer profile and location and the selection they offer in each location.
Seven countries in the Mena region make it into the top 20 in the 2011 index of top ranked emerging markets for global retail expansion.
Globally, the list is dominated by Latin American, Asian and Mena countries. Brazil, Uruguay and Chile ranked top three countries for global retail expansion; while other top 10 include India, Kuwait, China, Saudi Arabia, Peru, UAE and Turkey. Neither the US nor any of the West European country could make it to the top 30 list.