Just Released: "United Arab Emirates Retail Report Q4 2013"

The UAE Retail Report examines the long-term potential of the local consumer market, but flags short-term concerns about the impact on the UAE's economic outlook of significant structural weaknesses.

The report examines how best to maximise returns in the UAE retail market while minimising investment risk, and also explores the impact of a slowing export sector amid the broader global downturn on the Dubai consumer in particular and on the ability of producers and exporters to realise returns in the short term.

The report also analyses the growth and risk management strategies being employed by the leading players in the UAE retail sector, as they seek to maximise the growth opportunities offered by the local market.

Full Report Details at
- http://www.fastmr.com/prod/712750_united_arab_emirates_retail_report_q4_2013.aspx?afid=301

UAE per capita consumer spending is forecast to increase by 45.8% to 2017, compared with a regional growth average of 47.2%. The country comes first (out of seven) in BMI's MEA Retail Risk/Reward Ratings. Among all retail categories, mass grocery retail (MGR) will be the outperformer through to 2017 in growth terms. Sales are forecast to increase by nearly 57% between 2013 and the end of the period, from US$6.04bn to US$9.47bn as the UAE's high-income and largely expatriate population continues to make it well suited to modern retailing.

In the competitive arena, BMI sees upside potential in the fact that up to 40% of grocery retail sales are still accounted for by independent outlets, indicating that the MGR industry remains some way off saturation. There is room for store launches across both the high-value hypermarket and supermarket segments.

Over the last quarter, BMI has revised the following forecasts/views:

* Our baseline scenario sees the UAE economy expanding 3.3% in real terms in 2013, and 3.8% in 2014. With consumer and business sentiment appearing to have finally turned a corner, the outlook for household consumption and fixed investment is particularly bright over the coming quarters. A sharperthan- expected cut to domestic oil production, further deterioration in the ongoing eurozone crisis, and potential flare-up in geopolitical tensions with regard to Iran are key downside risks to our outlook.
* Despite the broadly favourable macro backdrop, we do not expect to see a significant acceleration in household consumption patterns this year, particularly given our still cautious outlook on the domestic banking sector. A combination of an increasingly uncertain regulatory backdrop with higher loan loss provisioning ahead of the 2014 'funding cliff' (at which point approximately US$30bn in liabilities are set to mature in Dubai alone), is likely to ensure credit growth to the non-oil private sector remains anaemic over the coming quarters.

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