New Retailing research report from Business Monitor International is now available from Fast Market Research
Boston, MA -- (SBWIRE) -- 12/28/2012 -- The UAE Retail Report examines the long-term potential of the local consumer market, but flags shortterm concerns about the impact on the UAE's economic outlook of lacklustre growth in the private nonhydrocarbon sector because of weak credit conditions.
The report examines how best to maximise returns in the UAE retail market while minimising investment risk, and also explores the impact of increased tensions between Iran and the West on the Dubai consumer in particular and on the ability of producers and exporters to realise returns in the short term.
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The report also analyses the growth and risk management strategies being employed by the leading players in the UAE retail sector, as they seek to maximise the growth opportunities offered by the local market.
The UAE comes third (out of seven) in BMI's MEA Retail risk/reward ratings (RRRs).
Among all retail categories, over-the-counter (OTC) pharmaceuticals will be the outperformer through to 2016 in growth terms, with sales forecast to increase by nearly 46% between 2012 and 2016, from US$0.28bn to US$0.41bn as new population and healthcare spending data provide more commercial opportunities for companies in the industry.
In the competitive arena, BMI sees upside potential in the government's substantial investment in the healthcare sector, with large projects such as the Dubai Healthcare City and DuBiotech encouraging foreign direct investment (FDI).
Over the last quarter, BMI has revised the following forecasts/views:
- BMI expects economic activity in the UAE to slow through the latter months of 2012, and is forecasting real GDP growth of 2.9% this year, down from an estimated 4.2% in 2011. That said, recent data indicators show that the economy has weathered the ongoing global downturn relatively well, with the tourism and trade sectors likely to remain particularly bright spots over the coming months. BMI therefore expects growth to pick up to 3.5% in 2013.
- BMI believes that the weak state of the domestic banking sector and corresponding anaemic pace of credit expansion is set to undermine household consumption. According to latest data from the National Statistical Office, household spending expanded only 4.3% in 2011 (underperforming exports, imports and fixed capital formation), and we have pencilled in growth of 5.2% and 5.1% in 2012 and 2013 respectively.
- According to the Statistics Centre - Abu Dhabi (SCAD), per capita income reached US$85,850 in 2010. As such, locals have significant spending power, and the emirate's relatively young population are poised to ensure long-term growth for retail operators.
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