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- The latest economic report confirms that the chain economy continues to grow – all sectors of the economy contribute
State of the UAE Retail Economy Q3 2022 report key findings:
- UAE growth on track despite global economic turmoil
- Retail economic spending in January-September up 15% year-on-year
- Non-retail economy surged by 29% in January-September compared to the same period in 2021
- Dubai property market continues to break records – transactions soared 60% in January-September compared to the same period last year
- E-commerce sales continue to grow rapidly and are expected to grow 22% this year to $6 billion
Dubai, United Arab Emirates: The UAE economy is on track to hit a record, the strongest since 2011, according to the latest in a series of quarterly economic reports from Majid Al Futtaim, a leading mall, community, retail and leisure pioneer in the Middle East, Africa and Asia The annual GDP growth of -Oxford Economics forecasts 6.8% in 2022 – a significant increase from the actual growth of 3.8% recorded in 2021.
According to the State of the UAE Retail Economy Q3 2022 report, both the oil and non-oil sectors played an important role – the biggest GDP driver was the oil sector, which grew by 13.4% as crude oil prices hovered around $100 % per barrel for most of the third quarter. The non-oil economy also showed strong growth, supported by government initiatives to create an investor-friendly environment, with a focus on digital and creative industries, the results of which are reflected in the S&P Global UAE Purchasing Managers’ Index – It hit a three-year high in August.
While inflation remains a top concern for many consumers, the level of concern has eased this quarter, with 92% of residents still expressing some concern but saying they are adjusting to the new normal by buying cautiously. Economic data bears this out, showing that all key sectors of the economy are gaining more and more results.
E-commerce continues to grow significantly, with sales expected to grow 22% this year to more than $6 billion, with the market expected to reach $9.2 billion by 2026. Spending in this segment increased 34% compared to January-September compared to the same period last year, and sales accounted for 11% of total retail economy sales.
The UAE’s strong economic indicators and investment-focused policy updates continue to attract international attention, while the ESG agenda continues to grow in strategic views across the public and private sectors. The implementation of the new law saw plastic bag use at Majid Al Futtaim retail stores drop by 85% in the first three months, despite a 10% increase in customer visits. Achieving net-zero emissions by 2050 would put the UAE ahead of almost every other country in the region. The result is a strong and resilient retail economy, while the housing market has defied the gravitational pull of the global economy.
Alain Bejjani, Chief Executive Officer of Majid Al Futtaim – Holding said: “Another strong quarter for the UAE’s retail economy demonstrates remarkable resilience across the industry and reinforces the country’s steady progress towards a return to sustainable growth. Supporting this progress The continuation of forward-looking government initiatives has made the UAE extremely attractive to international businesses – as have the steps the government is taking to become a sustainability leader in the MENA region. As all indicators point to a strong fourth quarter of the year , and with COVID-19 restrictions lifted, the UAE has put pandemic-related upheaval firmly on the back burner. We just need to consider the continued opportunity, safety and security this country offers to see why the world continues to flock to the region and build their future here.”
Travel and tourism tourists have returned, spending more now than they did before the upheaval caused by the pandemic. As restrictions continue to ease, pent-up travel demand is unleashed – Dubai saw a 182% year-on-year increase in international arrivals between January and August. Hotels have been a big beneficiary of increased tourist arrivals, with room nights staying up 28% year-over-year from January to August and 17% above pre-COVID-19 levels in 2019 at nearly 24 million.
The research also showed that business continued to boom in the UAE real estate market, with Dubai recording its strongest performance since 2011 in the January-September period. Transaction volumes were up 60% year-on-year, 14% in the quarter to 25,500 and up 77% this year to AED184 billion, a new record for both metrics.
Majid Al Futtaim’s Consumer and Business Insights (CBI) Initiative authored the report, charting
Happiness Lab – Majid Al Futtaim’s online community for market research in three major markets (UAE, Saudi Arabia and Egypt), in addition to over 797 million point-of-sale (POS) transactions totaling over 1820 transactions from over 5 countries AED 100 million from millions of shoppers from multiple sources (Majid Al Futtaim’s own data and POS data), as well as reports from respected third-party analysts and organisations.
Please visit the links below for the methodology and sources related to the cited data and to read the report on the state of the UAE retail economy for the third quarter of 2022.
At: https://www.majidalfuttaim.com/en/media-centre/trends-and-insights#stateoftheuaeretail
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About Majid Al Futtaim
Established in 1992, Majid Al Futtaim is a leading shopping centre, community, retail and leisure pioneer in the Middle East, Africa and Asia.
An extraordinary business success story, Majid Al Futtaim started with a vision of one man to change the face of shopping, entertainment and leisure, “creating beautiful moments for everyone every day”. It has since grown into one of the most respected and successful businesses in the United Arab Emirates, with operations in 17 international markets, more than 43,000 employees, and the highest credit rating (BBB) among private companies in the region.
Majid Al Futtaim owns and operates 29 shopping centres, 13 hotels and 4 mixed-use communities, and further development is underway in the area. The mall portfolio includes Mall of the Emirates, Mall of Egypt, Mall of Oman, City Centre Mall, My City Centre Community Centre, and five community malls in a joint venture with the government of Sharjah. The company is the exclusive franchisee of Carrefour in more than 30 markets in the Middle East, Africa and Asia, operating more than 450 stores, including City+, the region’s first checkout-free store, and an online store.
Majid Al Futtaim has more than 600 VOX theatres in the region and a range of world-class leisure and entertainment experiences, including Ski Dubai, Ski Egypt, Dreamscape, Magic Planet, Little Explorers and iFLY Dubai. The company is the parent company of fashion, home and specialty retail businesses representing international brands such as Abercrombie & Fitch, Hollister, AllSaints, lululemon sports, Crate & Barrel, LEGO and THAT, Majid Al Futtaim fashion concept store and app. In addition, Majid Al Futtaim operates facility and energy management company Enova through a joint venture with Veolia, a global leader in optimal environmental resource management.
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