Qatar has taken the Middle East retail market by surprise to emerge as the world’s fourth-most attractive retail investment hub, according to AT Kearney’s latest Global Retail Development Index.
The report, global Retail Expansion: An Unstoppable Force, ranked China first in a list of the top 30 most attractive retail markets. Qatar came in at number four, while the UAE, the region’s most popular shopping destination that has two of the world’s biggest malls, slipped three places to number seven.
Oman dropped nine places in the index to come in at number 26.
Despite the drop in the price of oil over the past year, AT Kearney said the Middle East’s retail sphere looked strong.
With total retail sales at US$12.4 billion (RO4.77bn) in 2014, Qatar has seen an extraordinary boost in retail development on the back the FIFA World Cup, which it is hosting in 2022. However, FIFA officials, which are currently mired in an FBI corruption investigation, this week cast some doubt on Qatar hosting the football world’s biggest event, as well as Russia in 2018.
Describing Qatar as a “new jewel in the Middle East”, AT Kearney said in its report that it had made an “impressive GRDI debut”.
“With population growth and an increasing number of expats, Qatar is no longer a market to ignore,” it said. “Until recently, international brands were limited by insufficient retail supply. This is changing as Doha welcomes 1 million square metres of retail space in the next two to three years.”
AT Kearney said that while the UAE’s retail market continued to grow steadily, it fell to seventh place because of new entries in the GRDI rankings.
“Although the market is near saturation, Dubai is cementing its position as the Middle East’s retail hub,” AT Kearney said.
Total retail sales in Oman hit US$11.9 billion last year, according to the report. However, it found that the outlook for the Sultanate remained positive.
“The market still shows plenty of retail potential, but retail development has been slower than other markets in the region and remains quite capital-centric,” it said.
“Oman has a small population and a relatively low GDP per capita among Gulf nations, but it is fairly untapped in terms of international retail presence. Retail sales are expected to grow at a steady 6 per cent through to 2020.”
However, the retail market in the Sultanate is set for significant expansion, with several large-scale projects already under way, such as Panorama Mall, Oman Mall, Muscat Festival City and Muscat Downtown Mall, as well as the recent opening of The Avenues Mall in Al Ghubra.
“All told, retail space is expected to grow by more than a third over the next couple of years,” AT Kearney added. “In addition to mega malls, smaller neighbourhood malls are expected to grow rapidly to serve the needs of local communities far from Muscat malls.”
2015 Global Retail Development Index
China
Uruguay
Chile
Qatar
Mongolia
Georgia
United Arab Emirates
Brazil
Malaysia
Armenia
Turkey
Indonesia
Kazakhstan
Sri Lanka
India
Peru
Saudi Arabia
Botswana
Panama
Colombia
Russia
Azerbaijan
Nigeria
Philippines
Jordan
Oman
Kuwait
Costa Rica
Mexico
Angola