Boston, MA -- (SBWIRE) -- 07/19/2013 -- With consumer and business sentiment appearing to have finally turned a corner, the outlook for household consumption and fixed investment in the UAE is particularly bright over the coming quarters. Our baseline scenario sees the UAE economy expanding 3.3% in real terms in 2013, and 3.8% in 2014. Despite the broadly favourable macro backdrop, we do not expect to see a significant acceleration in household consumption patterns this year, particularly given a still cautious outlook on the domestic banking sector.

Headline Industry Data

- In 2013, we expect total food consumption to increase by 5.3% in local currency terms. Over our fiveyear forecast period to 2017, we expect total food consumption to increase at a compound annual rate of 6.2%.
- Soft drinks volume sales are forecast to increase by 3.6% in 2013. To 2017, we forecast compound annual growth of 3.3%.
- Mass grocery retail sales are forecast to increase by 8.4 % in 2013 in local currency terms. To 2017, mass grocery retail sales are forecast to grow at a compound annual rate of 11.2%.

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Key Industry Trends And Developments

Agthia's F&D Division Outperforms: UAE-based diversified food and drink firm Agthia, which is present across a number of industries including flour production, animal feed and soft drinks, recently reported results for the year to December 2012. Company-wide sales increased 16% year-on-year (y-o-y) to AED1.33bn (US$362.2mn). Sales in the consumer business division grew 26% y-o-y in 2012. From our point of view, this strong growth continues to highlight the fact that there are great growth opportunities in soft drinks and in the wider fast-moving consumer goods space.

SPAR International Launches In Gulf Region: In early 2013, SPAR International announced plans to launch in the Gulf region, aiming to have 30 stores in the region by the end of 2015. The retailer is partnering with Abu Dhabi Cooperative Society, a local retailer, for its Middle East entry and expansion. Abu Dhabi Cooperative Society will open Spar stores in the UAE under licence. The group will also have the option to sub-license Spar 'to suitable partners' in the wider Middle East and North Africa region.

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