Fast Market Research recommends "United Arab Emirates Food & Drink Report Q1 2013" from Business Monitor International, now available
Boston, MA -- (SBWIRE) -- 12/27/2012 -- The outlook for household spending in the UAE over the coming quarters is encouraging, despite credit growth remaining anaemic. According to a recent report by Hay Group, 85% of firms in the UAE increased salaries in 2012, while a country-wide average nominal pay rise of 5.5% is forecast for 2013. Moreover, latest consumer and business confidence surveys by Bayt.com/YouGov appear to indicate that household consumption will gradually accelerate over the coming quarters, with both the 'consumer confidence' and 'consumer expectations' indices trending higher from their December 2011 troughs. Although timely retail sales data is relatively sparse, recent comments from automotive industry executives suggesting that new car sales rose by approximately 20% in the first eight months of 2012 would certainly seem to indicate that demand for consumer durables remains healthy. Our Middle East & North Africa team is forecasting household spending to expand by 7.0% in real terms in 2013, following estimated growth of 6.0% in 2012.
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Headline Industry Data
- 2013 total food consumption growth (local currency) = 5.3%; compound annual growth forecast to 2017 = 6.2%.
- 2013 carbonates soft drinks volume growth = 2.7%; compound annual growth forecast to 2017 = 2.5%.
- 2012 mass grocery retail sales growth (local currency) = 7.1%; compound annual growth forecast to 2017 = 9.1%.
Key Company Trends
Nestle Makes Major Investment: In June 2012, Nestle announced plans to construct a new US$136.1mn production facility in Dubai. Nestle has signed a partnership agreement with Dubai World Central for a 175,000-square-metre plot that will be used to manufacture nutrition, culinary and coffee products. By boosting its regional manufacturing presence, Nestle will be able to tailor an even greater proportion of its products to suit tastes and preferences across the region. This will also allow for greater local sourcing and fresher product, and being the firm's second production facility in Dubai, will create opportunities for synergies.
Agthia Announces Strong Profits: In July 2012, Agthia announced a net profit increase of 38% year-onyear (y-o-y) for H112, reaching AED56mn, while net sales rose by 15% y-o-y to AED642mn. Strong net sales growth of 19% y-o-y was reported in the consumer business division. Looking ahead, the company said that it plans on aggressively driving distribution of its recently launched Yoplait fresh dairy products and Chiquita natural juices. The company also said that it is planning to rebrand the Pelit Su brand and expand regional distribution, with plans to launch natural spring water in Gulf Cooperation Council countries.
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