The UAE has been ranked the eighth most attractive market globally for retailers, according to the retail operations index released by built asset consultancy Arcadis.
The index ranked 50 international markets based on key factors that retailers look for when choosing to enter a market.
The UAE was ranked first in the Middle East, with retailers benefitting from the strong infrastructure and ease of operation.
“The strategic location and physical presence of a store will continue to help successful retailers in the UAE make the greatest use of their store portfolios and brand marketing to attract customers,” said Middle East markets head of Arcadis Christopher Seymour.
“The quality of transportation such as roads and metros is a key factor contributing to a retailer’s success as the growing young population and increased number of expats and tourists make the decision to shop based on their accessibility from direct metro links to shopping malls.”
The index also forecasted a healthy performance for UAE’s retail sector. It estimated that the current economic stability will spur more spending and result in higher employment in the market, making it attractive to most retailers.
Qatar and Saudi Arabia were the second and third most attractive markets for retailers in the region while Kuwait and Egypt took the last places in terms of market attractiveness.
These markets ranked far below the UAE globally due to reduced ease in doing business and comparably less developed infrastructure.
Seymour also urged all retailers to be aware of the demographics before entering or expanding in the UAE market.
“If a business is going to operate effectively and potentially flourish, it is vital that retailers do their homework,” he said.
“They need to consider data and insight on their prospective markets and consider the varying factors that can impact portfolio success. For instance, a market that is expected to see strong economic growth and is ramping up on infrastructure investment has potential to improve its overall rankings in the upcoming years.”
Buoyed by growing sales in the region, retail conglomerates have reaped heavy profits.
The recently listed Emaar Malls, the retail unit of Emaar Properties, reported a 32 per cent rise in first-quarter profit while revenue jumped by 21 per cent.
Dubai-based Majid Al Futtaim reported a pre-tax profit growth of 10 per cent in 2014. The company added that its retail business grew 16 per cent to reach Dhs 1.1bn last year.