New Retailing research report from Business Monitor International is now available from Fast Market Research
Boston, MA -- (SBWIRE) -- 03/11/2013 -- The Kuwait Retail Report examines the long-term potential of the local consumer market, but flags shortterm concerns about the impact on Kuwait's economic outlook of depressed capital spending on the part of the government.
The report examines how best to maximise returns in the Kuwaiti retail market while minimising investment risk, and also explores the impact of the possibility of oil prices declining further than expected on the Kuwaiti consumer and on the ability of producers and exporters to realise returns in the short term.
The report also analyses the growth and risk management strategies being employed by the leading players in the Kuwaiti retail sector, as they seek to maximise the growth opportunities offered by the local market.
Kuwaiti per capita consumer spending is forecast to increase by 28.0% between 2013 and 2016, compared with a regional growth average of -2.7%. The country comes fourth (out of seven) in BMI's Middle East and Africa (MEA) Retail Risk/Reward Ratings, although it underperforms slightly for risk.
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Among all retail categories, consumer electronics will be one of the outperformers between 2013 and 2016 in growth terms, with sales forecast to increase by almost 24%, from US$1.09bn to US$1.35bn, with BMI forecasting per capita consumer electronics spend reaching US$339 by 2016 on the back of a high-earning, tech-literate population.
In the competitive arena, BMI sees upside potential in trade liberalisation, with the elimination of customs duties within the Gulf Cooperation Council continuing to stimulate the market; and in telecoms deregulation and 3G expansion, which will drive competition in value-added services and support spending levels on handsets.
Over the last quarter, BMI has revised the following forecasts/views:
- Kuwait's economic outlook heading into 2013 looks relatively bright on the back of robust domestic consumption, itself strengthened by loose fiscal policy backed by elevated oil prices. BMI maintains its forecast for real GDP growth to expand by 4.5% and 3.7% in 2012 and 2013 respectively. However, depressed capital spending remains an issue certain to weigh heavily on the economy over the longer term.
- BMI forecasts domestic consumption growth of 7.0% and 4.5% in 2012 and 2013 respectively as household consumption continues to power economic growth through to the end of 2013. A 25% wage rise for all government employees - of whom the majority are Kuwaiti nationals - was approved in March 2012, as well as a 15% increase to pension entitlements. The wage and benefit increases are expected to provide a strong boost to retailers and the consumer goods sector. Inflation has furthermore stayed subdued since the beginning of 2012, averaging 3.3% year-on-year throughout the first eight months of the year.
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