Boston, MA -- (SBWIRE) -- 06/29/2012 -- Our current outlook on Bahrain's consumer sector is cautiously optimistic, as consumer confidence looks like it is beginning to regain some strength. Bahrain's economy will continue gathering steam through 2012, supported by high oil prices, an influx of aid from Saudi Arabia and a gradual recovery in the tourism industry. We forecast real GDP growth of 3.4% in 2012, following an estimated 1.9% in 2011.
However, the political crisis will continue to weigh on the economic and consumer outlooks. Our core view is that an immediate resolution to the crisis remains unlikely. This has the potential to significantly dampen consumption and investment patterns over the coming years and will limit the economy's underlying growth potential. The political backdrop in Bahrain will remain tense in 2012, despite efforts by the Khalifa regime to minimise anti-government sentiment by pushing ahead with some constitutional reforms.
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On a brighter note, anecdotal evidence suggests the tourism sector has been slowly recovering, although visitor arrivals remain well below where they were before the unrest. As the majority of visitors are Saudis who cross the causeway linking the two countries for the weekend, the relatively bright economic outlook for the former should be positive for Bahrain's tourism sector this year. The return of the Formula One race in April, assuming it goes ahead and is not cancelled for a second year, will also provide some respite to service exports through a boost to the tourism sector.
Headline Industry Data (local currency)
- 2012 food consumption growth= +8.7%; compound annual growth rate (CAGR) to 2016 = +8.5%
- 2012 soft drink value sales growth = +7.4%; CAGR to 2016 = +7.3%
- 2012 mass grocery retail (MGR) sales = +10.9%; CAGR to 2016 = +10.2%
Key Company Trends
Waitrose Expanding: In March 2012, British supermarket retailer Waitrose opened its second outlet in Bahrain. The company then announced plans to open up to eight new stores in the country over the next few years. Waitrose said it will train its Bahraini staff at its Dubai-based facilities and it is looking for suitable store locations. A company representative said its ambitious expansion plans reflect its confidence in the local market.
Cutty Sark Makes A Move: In March 2012, Cyprus-based sales and distribution company FIX Wines & Spirits said it will expand its marketing and distribution deal with the Cutty Sark whisky brand to include the Gulf region. From July, FIX Wines & Spirits will exclusively represent the brand in Bahrain, Dubai, Abu Dhabi, Nothern Emirates, Qatar, Oman, Iraq, Syria, Lebanon, Jordan, Israel, Egypt, Morocco and Tunisia. Cutty Sark is owned by the Edrington Group and distribution was previously handled by an unspecified agent. The Edrington Group is hoping to grow its brands in the region.
Key Risks To Outlook
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