Fast Market Research recommends "Saudi Arabia Retail Report Q3 2013" from Business Monitor International, now available
Boston, MA -- (SBWIRE) -- 09/09/2013 -- The Saudi Arabian Retail Report examines the long-term potential of the local consumer market, but flags short-term concerns about the impact of a possible cutback in government spending on Saudi Arabia's economic outlook should the fiscal and current account position deteriorate.
The report examines how best to maximise returns in the Saudi retail market while minimising investment risk, and also explores the impact of slowing export growth on the Saudi 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 Saudi retail sector, as they seek to maximise the growth opportunities offered by the local market.
Saudi per capita consumer spending is forecast to increase by 29.1% to 2017, compared with a regional growth average of 53.5%. The country comes second (out of seven) in BMI's Middle East and Africa (MEA) Retail Risk/Reward Ratings, although it underperforms significantly for risk.
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Among all retail categories, mass grocery retail (MGR) will be one of the outperformers through to 2017 in growth terms. Sales are forecast to increase by 47.6% between 2013 and 2017, from US$32.70bn to US $48.26bn, as high disposable incomes among a proportion of the population create an increasingly aspirational consumer base interested in premium products. In the competitive arena, BMI sees upside potential in the fact that non-organised retail and independent outlets still account for more than 40% of total sales, which is strong evidence that significant scope remains for the penetration of organised grocery retailing.
Over the last quarter, BMI has revised the following forecasts/views:
- BMI forecasts real GDP growth of 4.1% in 2013, accelerating to 4.6% in 2014 on the back of a slight rebound in oil exports. Saudi Arabia's non-hydrocarbon sector will continue to drive overall economic growth over the next few quarters, helping to balance an ongoing decline in oil production. Business activity in the private sector remains supported by the government's loose fiscal policy stance, easy credit conditions and robust consumer confidence.
- We project private consumption to grow by 5.0% in 2013 and 2014, contributing approximately 2.7 percentage points to headline growth in both periods. The outlook for the retail sector is set to remain bright over the medium term, with sales benefiting from rising disposable incomes, favourable demographics and increasing urbanisation.
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