UAE retail sales forecast to reach $58bn in 2021

Retail sales in the UAE are expected to grow by 13 per cent to hit $58bn by the end of 2021, a new analysis from Dubai Chamber of Commerce and Industry has projected.

The growth in retail will be supported by pent up consumer demand in the second half of the year, as well as the Covid-19 vaccination programme and the Expo 2020 Dubai.

The analysis, based on recent data from Euromonitor, predicted that UAE retail sales are forecast to maintain 6.6 per cent annual growth in the medium term to reach $70.5bn by 2025, with store-based retailing growth forecast at a CAGR of 5.7 per cent, while non-store retailing is forecast to grow at a CAGR of 14.8 percent, reported state news agency WAM.

Progress related to the UAE’s vaccination campaigns is expected to boost demand in the second half of this year and attract consumers and tourists back to stores.

Expo 2020 Dubai, scheduled to kick off in Dubai this October, is also expected to be a major catalyst for the recovery of the retail sector, in addition to the support and incentives provided by governments to business sectors at the federal and local levels.

The UAE currently leads the Middle East and North Africa region in terms of household spending on e-commerce at $2,554 per household, which is twice the value of the global average of $1,156, and four times the value of the average in the MENA region ($629).

According to JLL, Dubai saw 110,000 square metres of retail gross leasable area completed in 2020, which brings the emirate’s total retail stock to 4.2 million square metres.

Meanwhile, Abu Dhabi retail space stock remained unchanged at 2.8 million square metres.

During 2021, Dubai is expected to see 761,000 square metres of retail gross leasable area added to the market, while 293,000 square metres of new retail gross leasable area is expected in Abu Dhabi by the end of the year.

The analysis added that the Covid-led digital shift has created new growth opportunities for regional expansion for traditional retail and e-commerce companies based in the UAE, especially in markets with large populations, such as Saudi Arabia, Egypt, Algeria and Morocco.