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New data from Majid Al Futtaim, the renowned shopping mall, communities, retail and leisure brand across the Middle East, Africa and Asia, shows that the UAE retail market’s recovery is set to persevere. This is according to the company’s quarterly update to its series of landmark retail sector reports.
Data for the State of the UAE Retail Economy report for Q2 2021 indicates that the recovery first sighted earlier in the year appears to be sustaining itself. There have been modest gains in many areas, with some experiencing dramatic growth as consumer demand surges once again.
Alain Bejjani, Chief Executive Officer at Majid Al Futtaim - Holding, said: "Looking back over the past six months, we continue to see positive trends across the UAE retail economy, and in some sectors significant progress in returning to pre-pandemic levels. We see this cautious optimism strongly driven by the robust vaccination measures taken by the UAE Government and local health authorities, which has served to protect our communities and provided additional confidence both here and abroad.
“Looking ahead, we continue to see an acceleration in consumer expectations towards omnichannel experiences, as digital and technology solutions become further integrated into everyday life. We also look forward to seeing further recovery in tourism-related sectors, bolstered by the opening of EXPO2020 later this year. Speaking to our collective efforts to rebuild post COVID-19 and the impressive resilience of the UAE market, this quarter’s data analysis confirms green shoots of sustainable growth. Majid Al Futtaim remains confident that the UAE retail economy is on track to make a full recovery.”
Some of the disruption caused by the COVID-19 pandemic has started to ease, not least because of the UAE’s highly successful vaccination programme. In some sectors, strong, pent-up demand has been unleashed by the relaxation of restrictions.
The residential property sector is a prime example, with a 215% increase in the number of residential property transactions in Dubai between May 2020 and May 2021, and a growth in transaction value of 357%.
Majid Al Futtaim research shows that shoppers are demonstrating increased comfort levels in public spaces with 64% of shoppers admitting to feeling comfortable visiting a shopping mall. While across Majid Al Futtaim’s own network of malls, total footfall increased by 11% in Q2 2021, compared with Q1 2021, the report says.
Consumer spend in non-mall retail destinations shows a 3% increase, when comparing the second quarter of 2021 with the equivalent period pre-pandemic (Q2 2019). Food and beverage sales rose 41% and home furnishings by 28%.
Although the retail economy in the UAE appears to be regaining some of the momentum lost to the pandemic, caution is an important consideration. Consumer spending in the overall UAE retail economy (including hyper/supermarkets, fashion, leisure and entertainment, and general retail) recorded a 3% decline in the first half of 2021 compared with the same period in pre-pandemic 2019.
E-commerce was one of the big growth areas of 2020, becoming the only available shopping channel in some cases. It is hanging on to its newly found status even though many shopping restrictions have been relaxed. Comparing the first half of 2021 with the first half of 2020, e-commerce sales in the UAE increased by 17%.
The prevailing mood of UAE retail in Q2 2021 is cautiously optimistic and confidence is on the rise with steady economic recovery. In time, the success of the UAE’s response measures and vaccination programme will see positive sentiment and resilience return with full force.
