What: An overview of the 2020 and Q1 2021 retail outlook in the GCC

Al Futtaim, owner of the Mall of Emirates in Dubai, released its first ever report on the state of the retail economy in the region. 2020 finished with a total decrease of -12% compared to 2019, but only -2% in December 2020 compared with 2019, which shows the rapid recovery which took place as soon as October 2020. Initial results from Q1 2021 seem to confirm that the rebound is under way.

However, the market has been considerably modified since 2019, due to the consequences of the pandemic (leading to lockdowns and restrictions, which were overall less strict in the region than in other parts of the world):

• E-commerce has doubled in share between 2019 and 2020, and represents now 25% of electronic sales, 7% to 9% of fashion sales, and 8% of groceries,
• Customers are more cautious with their spending, due to concerns related to their jobs, especially in a region where international tourism accounts for a significant share of the GDP (and represents 25% of the total retail business),
• Stores remain central to the experience of customers, who use them as points of interactions along their buying journey, in conjunction with digital channels.

Among other interesting KPIs mentioned in the report, Dubai residential rental level is, in Q1 2021, down by -20% compared to the previous market low in 2010. This is due to the increase of demand for villas including outside space, as well as the departure during the pandemic of many expats living in the region.

Economic recovery is expected to take place between 2021 and 2022, if there are no further waves of Covid taking place.

State of the UAE