x Abu Dhabi, UAESaturday 20 January 2018

Shorter shopping festival this year

Retailers predict a boost from Dubai Summer Surprises as greater numbers of tourists seeking to avoid the region's unrest take to the emirate's malls.

Modesh, the Dubai Summer Surprises mascot. Paulo Vecina / The National
Modesh, the Dubai Summer Surprises mascot. Paulo Vecina / The National

Dubai's summer shopping festival gets under way today as malls across the emirate undergo face-lifts amid rising competition.

Retailers are hoping that visitors opting for Dubai as a result of the so-called Arab Spring will boost sales.

"A lot of tourism in the region will be attracted to Dubai," said Neelesh Bhatnagar, the chief executive of Emax Electronics. "Summer Surprises is typically quite good for the market … and people who come on holiday to the UAE also benefit."

The large numbers of foreign tourists meant more customers buying electronics to take back to their home countries, he said.

While many retailers in the West offer reduced prices in the winter as incentive for customers to trudge through snow or brave wet weather, in the Middle East the decline in the numbers of shoppers occurs during the summer. This year, the Dubai Summer Surprises event has been cut to five weeks, ending on July 31, rather than extending into August as has been done in the past.

The event has been cut back so as not to clash with Ramadan, which this year begins at the start of August.

Retailers have mixed feelings about the length of the sales period, which has been shortened to 40 days from 64 in 2009.

The shorter sales period was not as much of a concern as the fact that Ramadan and the "back to school" period would overlap this year, Mr Bhatnagar said.

Business from foreign tourists is also expected to fall during Ramadan as visitors from the Gulf are more likely to go on holidays before the holy month, he said.

Other retailers are worried that the shorter sales period allows for less time to clear stock.

But the recent increase in the number of shoppers comes as the outlook for retailers appears brighter, said Simon Thomson, the principal at Retail International, a consultancy.

"They're doing a little better than they were doing six or nine months ago," he said. "Dubai and now Abu Dhabi as well are benefiting a bit from some of the political disturbances that have been [taking place] in Cairo and elsewhere. Tourist shoppers are coming back and choosing to shop in the Gulf."

The result would be a boost for some malls that are starting to see tenants depart, Mr Thomson added.

"We've seen that in Dubai particularly, where some of the more expensive, high-end brands are moving out and [malls] are waiting for more value brands," he said.

But the summer boost for retailers comes alongside steadily falling rates for mall rentals, said Craig Plumb, the head of research for the Middle East and North Africa at Jones Lang LaSalle.

"Rents have been falling over the last six months, and we think overall the market is probably close to the bottom," he said.

The large number of malls in Dubaiwas helping to push down rents, Mr Plumb added, although spaces at big shopping centres such as Dubai Mall and Mall of the Emirates were seeing the greatest demand among occupiers, at the expense of others such as Wafi Mall and BurJuman Mall.

"The big malls are going to benefit from tourism retailing, which tends to be focused on [those] with good relations with the hotels," Mr Plumb said.