Fast Market Research recommends "Saudi Arabia Retail Report Q3 2012" from Business Monitor International, now available
Boston, MA -- (SBWIRE) -- 07/31/2012 -- The Saudi Arabian Retail Report examines the long-term potential of the local consumer market, but flags short-term concerns about the impact of the diminishing impact of government spending on Saudi Arabia's economic outlook.
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 31% to 2016, compared with a regional growth average of only 7%. 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 the outperformer through to 2016 in growth terms, with sales forecast to increase by 49% between 2012 and 2016, from US$29.03bn to US$43.29bn, 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:
- Recently released leading indicator data have reaffirmed BMI's positive outlook on the Saudi Arabian economy, as loose monetary and fiscal policy continue to drive growth on almost all fronts. We have revised up our forecast for real GDP growth in 2012 from 4.6% to 5.3%, though we still expect growth to slow to 4.1% in 2013 as the impact of government spending begins to fade.
- With consumers in Saudi Arabia benefiting from heavy government spending and easy monetary policy, BMI's outlook for household consumption remains upbeat. Across the board, consumption-related data paint a positive picture. The total value of cash withdrawals from ATMs reached a nine-month high of SAR51.7bn (US$13.8bn) in March (up 11.5% year-onyear, y-o-y), while the total value of point-of-sale transactions in the country reached SAR28.3trn in Q112, a 37.8% y-o-y increase.
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