More than 200 retailers are waiting to see if the launch of the Dubai Metro will lead to an increase in sales.
Shop owners enter unknown territory
DUBAI // Dubai, the shopping capital of the Middle East, never knowingly overlooks a chance to create another retail opportunity and the opening of the city's Metro is no exception. Although many passengers are expected to ride the rails to the malls served by the Red Line, shoppers will find plenty of opportunity to part with their cash without ever leaving the Metro's elegant stations, walkways and bridges.
The Red and Green lines together will eventually house more than 200 shops, ranging from cafes, florists, book stores and convenience shops to fashion and accessories stores, electronics outlets, pharmacies and banks. The Red Line stations have space for 113 outlets. Some are Lilliputian units of a mere 10 square metres; the largest is 600 square metres. Each Metro stop will have at least two and as many as 12 stores, aiming to cater for the estimated 4,000 commuters who will pass by in each direction every hour.
Store owners hope those commuters will develop a Metro shopping habit, and the Roads and Transport Authority (RTA) has said it also expects to attract a large number of non-commuting shoppers. But retailers and the RTA alike are to a certain extent operating in uncharted waters. The Ramee hotel group, which will open its first Ramee Deli at the Burjuman station, is unsure what to expect. "We will see how it goes," said Renjith Nair, a spokesman for the company. "This is our chance to test the water. There will be an opportunity to open more in other stations if it does well."
All the retail units a total of 11,000 square metres were put out to tender by the RTA. By the end of last year 500 bidders had come forward, and by May more than 90 per cent of outlets had been snapped up. Bids were as much as three times higher than the minimum required. "It reflects the public's confidence in the Metro and the positive impact it will create in their daily lives," said Abdul Mohsen Ibrahim, chief executive of strategy and corporate governance at the RTA.
Not everything has gone smoothly, however. A chain of convenience stores announced late last month that it was backing out of 18 stores it had planned to open on the Red Line. Last Minute stores blamed uncertainty about how many stations would be ready by opening day; the RTA later confirmed that only 10 of the line's 29 stations would be open by Wednesday. A spokesman for Last Minute told The National it was unwilling to invest heavily without written confirmation from the RTA of when the stations would open. Rent for the stores over two years would total Dh19 million (US$70m) and the company expected to spend another Dh45 million on fitting out.
It still plans to open 10 stores on the Green Line, which is scheduled to start running next year. Retailers dealing in food and drink including some outlets that are too small to seat customers face a particular challenge: food and drink are banned on the Metro, with violators facing a Dh100 fine. Among the food-and-drink outlets will be Ramee Deli, one of five shops in Burjuman station. "The Dh100 fine will affect business but hopefully only a little," said the company's Mr Nair. "I think someone travelling from Burjuman to Jebel Ali will sit, have a sandwich and coffee and then catch the train."
The Ramee Deli has seating for 25 and some customers are expected to "grab and go" when leaving the Metro. "This is part of the Ramee group's ambitious and fast-growing retail food and beverage developments," Mr Nair said. "We already have a New York Deli in our Regal Plaza hotel in Bur Dubai, but this will be the first Ramee Deli. It is the only one we are opening as part of the Metro." He said the deli was expected to attract about 500 customers a day, with numbers dropping off at the weekend.
One retailer that will not be relying on eating habits is the 40-year-old UK-based stationery chain Paperchase, which has numerous outlets at British rail and underground stations and hopes to mirror their success in Dubai. The store group has outlets in Dubai Mall and Mall of the Emirates and is opening its first Metro branch inside the Mall of the Emirates station. "I imagine it is going to be very much like our stations in the UK where people travelling to and from work pop in," said Penny Duke, a spokeswoman for the chain.
"Our stores are geared toward people buying cards, wrapping paper or gift products as planned purchases rather than impulse buys because people know the stores are there." The Metro store will stock cards, stationery, laptop bags and gifts. Paperchase will be one of 10 shops in the 175-metre air-conditioned walkway between Mall of the Emirates and the Metro station of the same name. The others, situated over the Carrefour supermarket, will include a Borders Express bookshop, Cold Stone Creamery, Home Sweet Home, Emax consumer electronics store and a Nokia shop.
Although the RTA expects a large number of non-commuting shoppers, Parveez Pasha, an assistant manager at Borders in the shopping mall, said he felt the Metro outlet would be a "quick stop" only, though the company was expecting 1,000 customers day. "There is no place to sit and browse books at leisure so it will be for people just passing through who are looking for something to read on the train," he said.
"There will be about 10 staff and we will only stock bestsellers, as listed in the New York Times, as well as newspapers and magazines." Peyman Younes Parham, director of communications at the RTA, thinks the shops will be a success. People said convenience stores in petrol stations would function only as quick-stop shops, Mr Parham said, "but our research shows people visit them an average of 20 times a month".
"That means people are no longer using them as they are simply passing through," he said, "and we think there will be people coming to Metro shops who are not just commuters." On the other hand, the Metro outlets will not be so alluring that customers will no longer bother going into the malls. "It is a totally different experience from shopping malls and will not impact on retail there," Mr Parham predicted.