The Apparel in United Arab Emirates market research report includes:
EXECUTIVE SUMMARY
Slow growth due to high sales base and economic downturn
Apparel saw only slow volume growth during the review period as a whole. This is partly due to an already high sales base, with the United Arab Emirates being well-established as a popular shopping destination in the region. In addition, sales were hit hard by the economic downturn in 2009, seeing volume decline in this year and stagnancy in 2010 as consumers sought to economise. Constant value sales performed even worse than volume sales, seeing decline for the review period as a whole due to high inflation, strong consumer price-sensitivity and a growing focus on price competition among the leading players.
2011 benefits from growing economic confidence and rise in tourism
2011 however saw a stronger performance in comparison to the review period as a whole. Volume sales rose by their strongest annual rate in the year, with 2011 also seeing the first annual constant value growth during the review period. This good recovery was linked to rising economic confidence, as the United Arab Emirates returned to economic growth in 2010 and 2011. Lower inflation and a rise in incoming tourism further boosted sales in 2011. Tourism benefited from unrest across the Middle East, with many regional tourists consequently opting for the United Arab Emirates as a safe holiday destination. The popularity of the country as a shopping destination and events such as the Dubai Shopping Festival resulted in many opting to browse shopping malls and buy apparel during their stay.
International brands lead but Landmark benefits from home-grown concepts
The majority of leading brands are strong international franchises operated by large local or regional retailers, with the top two brands in 2010 for example being Azadea’s Zara and M H Alshaya’s H&M. Landmark Group was however the leading player overall in 2011, with this company largely benefiting from its home-grown brands such as Splash and Shoe Mart. These offer affordable prices and apparel closely tailored to suit their target consumer base. There was marked consolidation in 2011 over the previous year, meanwhile, as leading players such as Landmark and Azadea used price promotions to attract consumers.
Consumers shift from open markets to air conditioned shopping malls
Consolidation was also linked to ongoing retail developments in the United Arab Emirates, due to the growing popularity of shopping malls. Shopping is increasingly regarded as a leisure pursuit, both for domestic consumers and for the large number of incoming tourists in the country. This trend resulted in many consumers switching from buying unbranded products in open markets to buying products from the leading brands in comfortable, secure and air conditioned shopping malls. This trend was also encouraged by westernisation and by a growing focus on branding in the country. As a result, apparel specialist retailers, department stores and sports goods stores continued to gain share from open markets within “other” non-grocery retailers.
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