Bargain hunters start to fall into fashion

The UAE's biggest malls attract a different type of retailer as cost-conscious consumers make their dirhams go further.

Daiso is one of the many thrift stores in the UAE that offers shoppers a variety of discounted items. Delores Johnson / The National

Once dominated by designer brands and luxurious labels, the UAE's biggest malls are attracting a different type of retailer as cost-conscious consumers try to make their dirhams go further.

Low-cost retailers and discount websites have ballooned across the Emirates, and many are experiencing strong sales growth, driven by an increasing number of shoppers looking for bargains.

Matalan, the value retailer based in the UK, will launch its sixth store in the Middle East when Mushrif Mall opens next month in Abu Dhabi. It also expects to open a store in Fujairah in October and another in Muscat by the end of the year.

Hasit Kakkad, the retail manager for Matalan, says the group is expanding thanks to growing sales in the first five months of this year compared with the same period last year.

"We are seeing a very healthy double-digit growth because the Middle East has always lacked a quality value retailer," Mr Kakkad said. "There are a lot of value retailers, but brands such as Matalan and New Look have a higher quality product."

Matalan's double-digit growth in sales is some way higher than the overall growth in the retail industry, which many analysts predict will grow only in the single digits. Euromonitor, a data provider, estimates the sector will grow just 1 per cent this year.

Other value retailers are expanding stores, including Daiso, the Japanese store that offers items for Dh6 (US$1.63), and New Look, the UK fashion chain.

In the Middle East, sales growth at Max, one of the largest fashion retailers in the UAE, has risen 25 per cent so far this year compared with the same period last year.

"Consumers had previously limited choice for value retail before the economic downturn," said Hariharan Ramanathan, the chief executive of Max. "Consumers have become more value-conscious and look for a credible alternative to the other brands."

Muhammad Chbib, the chief executive of the online discount shopping club Sukar.com, says people are now hungry for value in the UAE.

"I think wherever you go these days, people want to get bargains," he said. The website, which offers discounts on luxury goods of up to 90 per cent, was launched a year ago and now has more than 500,000 registered shoppers.

Cobone.com, a website that offers discounts on everything from holidays to Apple iPads, also just passed the half-million mark in online buyers.

Paul Kenny, its chief executive, said retailers were realising how discounts could entice customers.

The site recently ran a 50 per cent discount promotion for clothing at all United Colors of Benetton stores in the UAE.

"The discount concept has just taken off completely," Mr Kenny said.

Also growing in popularity is the Dubai Outlet Mall, which offers 30 per cent discounts on the usual prices at retail outlets.

Sales at the mall increased by 15 per cent in the first three months of this year.

Mr Kakkad said that offering low-cost fashion in stores furnished to high-end specifications had helped Matalan's brand gain recognition.

"We sell exactly the same Matalan-branded clothes here that we do in the UK, but the stores are completely different, they are furnished like a John Lewis," he said.

Matalan, which partners with the Business Trading Company in the Middle East, has three stores in the UAE; in the Arabian Centre and Lamcy Plaza in Dubai and Dalma Mall in Abu Dhabi.