Saudi Arabia Retail Report Q2 2016 - New Report Available

Saudi Arabia contains strong fundamentals for sustained growth in the retail sector over the medium-term , but the recent slump in oil prices will weigh on the economic growth and government spending in 2016. T h is has prompted a downward revision to our 2016 household expenditure growth in the retail sector from 8.1 % to 7.8%.

Key Views & Developments

Our Country Risks team has recently revised down Saudi Arabia's growth forecasts for 2016 and 2017 reflecting the economically disruptive nature of the government's 2016 budget and the further collapse in global energy prices. The economic headwinds are expected to have a negative effect on the retail sector, as illustrated by point-of-sale transactions, which growth has slowed from the high of 42.5% in February 2015 to just 6.5% at the end of 2015.

Numerous government subsidy cuts on fuel, water, electricity, ethane and gas will raise consumer price inflation levels from 2.2% in 2015 to 3.5% in 2016 and 4.0% in 2017. Regional plans to introduce value-added tax from 2018 onwards pose a further risk to our forecast. This could negatively affect household spending, especially in the non-essentials category.

Full Report Details at
- http://www.fastmr.com/prod/1130989_saudi_arabia_retail_report_q2.aspx?afid=301

Saudi Arabia has eased restrictions on foreign investors to allow 100% ownership of retail and wholesale businesses in the kingdom. The move is in line with the kingdom's aim to attract more high-end investors into the kingdom, support job creation for Saudi citizens, introduce new technology and diversify Saudi Arabia's economy away from oil.

Kuwaiti real estate firm Mabanee announced its Saudi unit Shumoul Holding Company secured approval to build a SAR7bn (USD1.9bn) retail, residential and commercial complex in the capital Riyadh. The complex, Avenues Riyadh, will include a shopping mall as well as residential and office units. The project is expected to be completed by 2019.

The Saudi Arabia Retail Report has been researched at source and features BMI Research's independent assessment and forecasts for the retail sector. The report examines key drivers of retail sales growth and future prospects, including consumer spending and private sector investment.

BMI's Saudi Arabia Retail Report also examines the level of development and potential for growth of the retail sector, the commercial initiatives of major players, changing consumer demographics that influence demand and the regulatory environment. Key sub-sectors include mass grocery retail, autos, over-the-counter pharmaceuticals, computers and consumer electronics.

Key Benefits
Benchmark BMI's independent retail industry forecasts for Saudi Arabia to test other views - a key input for successful budgeting and strategic business planning in the Saudi retail market.
Target business opportunities and risks in Saudi Arabia through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.

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