x Abu Dhabi, UAEMonday 22 January 2018

UAE consumer spending to remain strong

High street fashion brand retailers expect strong consumer spending to continue into the second half of the year.

There has been a 50 per cent spike in retail sales over the Eid weekend. Ravindranath K / The National
There has been a 50 per cent spike in retail sales over the Eid weekend. Ravindranath K / The National

High street fashion brand retailers expect strong consumer spending to continue into the second half of the year building on a robust first half performance including a 50 per cent spike in sales over the Eid weekend.

"Bridge" brands, such as Ted Baker and Bebe, which sit between value and luxury labels, did the best over the holiday period.

Like for like trading among bridge brands was up 53 per cent, said David Macadam, the chief executive and vice chairman for the Middle East and North Africa region of The International Council of Shopping Centres and the Middle East Council of Shopping Centres.

"It's a huge amount year over year. And the luxury brands are making their own way. They [were up] by 30 per cent to 35 per cent," he said.

However, sales of value brands were not as strong as they had been in previous years, added Mr Macadam.

"In past years the value retail had the biggest growth but this year they didn't have that growth at all. But that's an indication that people are feeling more positive when they are buying more expensive brands," said Mr Macadam.

"They are feeling confident about the future because they are spending their money."

The bumper sales were a continuation of a trend which began before Ramadan with the Dubai Summer Surprises festival and will not end until next month with back to school preparations.

"These three months of July, August and September are very good for the economy, for retail," said Nassim Nasr, the general manager of Integer.

The second, bigger Eid, Eid Al Adha, in October, is unlikely to match the boost in sales, added Mr Macadam. But retail would likely remain strong for the rest of the year.

"I wouldn't think it would be as big again but what I would say is that there is optimism in the market, which is very positive and that people are spending today's dollars with the expectation that the future will hold even more," said Mr Macadam.

Dubai Mall welcomed hundreds of thousands of visitors over the weekend, according to Nasser Rafi, the chief executive at Emaar Malls Group.

"Led by the Eid in Dubai campaign, which served as a strong catalyst for growth, The Dubai Mall offered visitors superb deals and promotions across its various facets, from retail stores to the leisure attractions, energising the retail and tourism sectors of the city," he said.

"Having recorded robust visitor arrivals this Eid, we look forward to the sustained tourist footfall through the rest of the year," added Mr Rafi.

And there are reasons to be optimistic about tourist spending going forward.

Dubai Department of Tourism and Commerce Marketing statistics show that there has been an 18 per cent increase in inbound travellers from the GCC in the first half of the year compared to the same period the year previously.

Dubai is a big destination during holidays for tourists from Saudi Arabia and Qatar, which both gave their public sector workers 12 days off for Eid Al Fitr. The long break was another factor in the surging sales, according to experts.

"Inbound leisure travel in particular from Saudi Arabia traditionally increases during summer and festive periods - a major factor that influences this surge is the promotional offers by hotels and retailers to attract GCC families to Dubai, including competitive room rates, attractive discounts and promotions as well as a wide variety of family orientated activities in malls and other leisure destinations within the city," said Gaurav Sinha, the founder and chief executive of Insignia.

"Saudi shoppers are also big spenders and this helps retailers as they increase both transaction values and enjoy higher footfall through their outlets."

Sales to Saudi tourists were responsible for the bulk of the 10 to 15 per cent increase in business by Pure Gold Jewellers.

"Local sales was not very impressive because most of the expats are out of the country but luckily we got good business from Middle Eastern [tourists] who came here," said Firoz Merchant, the chairman and founder of Pure Gold.

 

gduncan@thenational.ae