Four GCC countries ranked in the top 20 in A.T. Kearney’s 12th Global Retail Development Index (GRDI). The report released Wednesday confirmed the continued strength of the retail sector in the GCC, now with another top 10 entry. In the 12th Global Retail Development Index (GRDI), four GCC countries rank in the top 20. U.A.E. (#7), new entrant Oman (#8), Kuwait (#12), and Saudi Arabia (#14). Globally Brazil retains the #1 position for the second year in a row and as Chile (#2) and China (#3) climb, India (#5) drops down one place, according to A.T. Kearney, a global management consultancy.
"We are seeing GCC retailers grow exponentially. Some have reached their 100th store opening milestone in a third of the time compared to developed markets and some are experiencing growth rates 3-4 times faster than their mature peers we call it hyper-speed evolution," said Dr. Martin Fabel, Partner and head of Consumer Industry and Retail Practice, A. T. Kearney Middle East.
Saudi Arabia’s strong fundamentals of rising GDP, population growth and increased government spending solidifies its position in the top 20, maintaining its standing as among the largest and most attractive markets in the Middle East. Several international brands have announced expansion plans to capture the anticipated increase in Saudi consumer spending in parallel with the government stimulus plan to inject about $110 billion into the economy over the next five years.
According to the study, retailers across the Middle East region are turning to private labels as they increase focus on bottom-line growth. Today private labels account for 10 percent of sales, up from 3 percent three years ago. The region is also witnessing a spread and increased uptake of e-commerce as trust in on-line payment increases and competency in logistics channels improve. The growth of discount voucher websites signifies retailers leveraging the sentiment change in on-line spending behavior. This mirrors the global trend of overall e-commerce growth outpacing physical retail in many markets providing retailers a great tool to test the market, learn about consumers and brand build without significant capital investment.
"GCC’s strong representation in the global index reflects the on-going opportunities for retailers looking to expand their brands in fast-growing markets. While retail activity here reflects many of the global trends, it also highlights the often regionally concentrated demographic segmentation of the consumer market, the composition of which varies from region to region, demanding a targeted portfolio approach for successful go-to-market strategies," Fabel added.
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