Retailers in the UAE remain bullish about the next 12 months, despite wavering consumer confidence and falling tourist spending.
Ahead of the launch next week of Dubai Shopping Festival, experts believe companies must work together to ensure shoppers continue to pound the malls.
And they said they were positive DSF would be the catalyst for high visitor figures to the country's malls and record receipts in-store.
Tax-free UAE does not have the weapons of VAT and interest rate cuts to lure people into stores.
Instead, the country's retailers must make a "collective effort" to confront the challenge of dipping consumer confidence, as claimed in a recent survey by Bayt.com and YouGovSiraj.
Eisa Ibrahim, General Manager of BurJuman and Chairman of Dubai Shopping Mall Group, said the most important way to increase spending was to cut prices and offer shoppers bargains. And this year's DSF, which runs from Thursday until Sunday, February 15, was expected to be just the push shoppers need, he said. Around 6,000 retail outlets are expected to participate in the DSF this year.
Many retailers are gearing up to combat the worsening economic conditions around the world, which have affected footfall, by offering lucrative bargains and prizes.
"Taking into consideration the confidence of consumers and the overall scenario worldwide, we could do great by offering good discounts within our outlets. Shopping malls can also go forward with prizes and promotions to entice people to spend," said Ibrahim.
"I think the DSF this season is a great opportunity for retail outlets to be more persuasive by offering big discounts and offers to shoppers."
Organisers at the DSF Office said it was doing its part to "re-energise" the retail and hospitality sectors in Dubai and to contribute to boosting confidence. The office recently met with retailers, government departments and leaders from the tourism sector to discuss how to overcome the challenges facing the retail and hospitality industry at present. "Co-ordinating with various private sector umbrella organisations, such as the Dubai Shopping Malls Group, the Dubai Gold and Jewellery Group and the hotels' groups, the DSF Office has emphasised the fact that retailers and hotels need to come together to offer shoppers value-added promotions on a scale bigger and better than previous years," said Laila Suhail, Chief Executive Officer of the DSF Office.
"The number of retail outlets involved indicates a healthy sign that the retail industry is gearing to transform Dubai into a retail haven for shoppers during DSF 2009," she said.
Last year's DSF saw 3.2 million visitors spend around Dh10 billion during the month-long festival.
The organisers are keen to keep the momentum at similar levels this time around despite the economic challenges. Shopping destinations taking part this year will include the newly-opened The Dubai Mall and The Walk at Jumeirah Beach Residence.
Ibrahim said substantial reductions in room rates by Dubai hotels during the season would also attract more visitors to Dubai during DSF.
"There are so many sectors in Dubai that can make use of the circumstances and try to rebuild confidence – it's all to do with the sentiments of people. If the different sectors of the economy try to go the extra mile and be more attractive and persuasive for consumers, I think we're going to gain their confidence back," he said.
And the increasing numbers of malls being opened are testament to the Dubai retail sector's position as one of the emirate's most profitable.
The Dubai-based Middle East Council of Shopping Centres (MECSC) has predicted the sector will contribute as much as 50 per cent of GDP by the end of this year. "Dubai's retail spending is forecast to cross Dh27.8bn by the end of the year as a result of massive retail and commercial developments such as Dubai Festival City, Mall of Arabia, Mall of the Emirates and The Dubai Mall," a MECSC spokesman said. According to the council, retail spending in the country as a whole was expected to surpass Dh37bn by the year-end.
However, UAE residents' perceptions about the current period being a good time to do business has dropped to 15 per cent now from June, when optimism reigned at 42 per cent, the Bayt.com survey revealed last week.
The Mall of the Emirates said it had escaped the jolt of recession, with neither a decrease or increase in visitor figures. "We have been stable over the past few months, and we expect the DSF to be a boom for us," said Fuad Mansoor Sharaf, Vice-President of the mall.
According to the MECSC, 7.75 million square metres of gross leasable area of organised retail space was available in the Gulf countries at the end of 2007. This is expected to go up to 18.5 million square metres across GCC nations by 2020, the council said.