Shoppers browse at the Dubai Outlet Mall in Dubai. Consultants say there is tension in Dubai's retail sector. Satish Kumar / The National
Shoppers browse at the Dubai Outlet Mall in Dubai. Consultants say there is tension in Dubai's retail sector. Satish Kumar / The National

Economic uncertainty and online shopping contribute to Dubai’s changing retail landscape



A decade-long retail boom has been built around UAE shoppers’ love of the mall. But a strong dollar, weakening consumer confidence and the rise of e-commerce are changing shopping habits.

This comes with millions of square feet of new mall space due to complete by the end of the decade, including what could be the most lavish shopping centre ever built in the form of the 8 million square feet Mall of the World to be developed by Dubai Holding. “We are seeing some signs of stress since late last year,” says Jayant Ganwani, chief executive of the Dubai-based Lals Group. “It effects different segments of the retail stratosphere in different ways. The fast-moving consumer goods and middle market items have seen far less attrition than the high-end haute couture conspicuous consumption items.” Double-digit passenger growth through airports in Dubai and Abu Dhabi, the tax-free salaries of residents and a rapidly expanding population have encouraged a wave of mega-mall development with a second wave of community mall construction following rapidly behind. But now retailers are facing the strongest economic headwinds since the financial crisis, stoked by a weak oil price and associated slowing economy. Last week the IMF cut its projections for the UAE’s economic growth to 3.2 per cent this year. It was the second time in six months that the IMF has revised its growth forecast for the UAE down from 4.5 per cent in October. Other oil exporters in the region face similar downgrades. “If there is a fear of recession the first thing that the consumer in the middle market does is start to hoard money in case they lose their job,” says Mr Ganwani, whose company owns the Homes R Us chain of furniture stores. “When they go through this phase they basically stop spending money on anything durable in nature – so electronics, furniture and fashion. That is what we are seeing at the moment.” The strong dollar is also crimping the purchasing power of visitors from the euro zone, while the collapse of the rouble has had a devastating impact of on the number of Russian tourists who visit and the amount of money they spend. Those factors are already combining to create tension in Dubai’s retail sector say consultants, as some retailers struggle to reconcile the rents they pay with declining till receipts. “The retail market continues to be constrained by the decrease in spending, restricting overall growth levels,” said Craig Plumb, the regional head of research at JLL, the international real estate consultants in its latest report on the Dubai retail sector. “We expect performance of the retail market to remain stagnant throughout 2015, following estimates of a slowdown in retail sales growth figures,” he said.

“In the end convenience is cost,” says Florian Mack, the co-owner of the e-commerce start-up lens.ae, which sells contact lenses online. That challenges the conventional wisdom of the UAE retail industry, which maintains shopping is a leisure activity in its own right – one of several reasons that shoppers have been slower to adopt online shopping than in other regions – together with a reluctance to trust the web with personal bank details. “We’ve been hearing that since we started,” says Hosam Arab, a co-founder of namshi.com, the online fashion and footwear retailer.

scronin@thenational.ae

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Emergency

Director: Kangana Ranaut

Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry 

Rating: 2/5

U19 World Cup in South Africa

Group A: India, Japan, New Zealand, Sri Lanka

Group B: Australia, England, Nigeria, West Indies

Group C: Bangladesh, Pakistan, Scotland, Zimbabwe

Group D: Afghanistan, Canada, South Africa, UAE

UAE fixtures

Saturday, January 18, v Canada

Wednesday, January 22, v Afghanistan

Saturday, January 25, v South Africa

UAE squad

Aryan Lakra (captain), Vriitya Aravind, Deshan Chethyia, Mohammed Farazuddin, Jonathan Figy, Osama Hassan, Karthik Meiyappan, Rishabh Mukherjee, Ali Naseer, Wasi Shah, Alishan Sharafu, Sanchit Sharma, Kai Smith, Akasha Tahir, Ansh Tandon

Other workplace saving schemes
  • The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
  • Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
  • National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
  • In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
  • Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
ACL Elite (West) - fixtures

Monday, Sept 30

Al Sadd v Esteghlal (8pm)
Persepolis v Pakhtakor (8pm)
Al Wasl v Al Ahli (8pm)
Al Nassr v Al Rayyan (10pm)

Tuesday, Oct 1
Al Hilal v Al Shorta (10pm)
Al Gharafa v Al Ain (10pm)

Zakat definitions

Zakat: an Arabic word meaning ‘to cleanse’ or ‘purification’.

Nisab: the minimum amount that a Muslim must have before being obliged to pay zakat. Traditionally, the nisab threshold was 87.48 grams of gold, or 612.36 grams of silver. The monetary value of the nisab therefore varies by current prices and currencies.

Zakat Al Mal: the ‘cleansing’ of wealth, as one of the five pillars of Islam; a spiritual duty for all Muslims meeting the ‘nisab’ wealth criteria in a lunar year, to pay 2.5 per cent of their wealth in alms to the deserving and needy.

Zakat Al Fitr: a donation to charity given during Ramadan, before Eid Al Fitr, in the form of food. Every adult Muslim who possesses food in excess of the needs of themselves and their family must pay two qadahs (an old measure just over 2 kilograms) of flour, wheat, barley or rice from each person in a household, as a minimum.

German intelligence warnings
  • 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
  • 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
  • 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250 

Source: Federal Office for the Protection of the Constitution

How to avoid crypto fraud
  • Use unique usernames and passwords while enabling multi-factor authentication.
  • Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
  • Avoid suspicious social media ads promoting fraudulent schemes.
  • Only invest in crypto projects that you fully understand.
  • Critically assess whether a project’s promises or returns seem too good to be true.
  • Only use reputable platforms that have a track record of strong regulatory compliance.
  • Store funds in hardware wallets as opposed to online exchanges.
The Sand Castle

Director: Matty Brown

Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea

Rating: 2.5/5

How to protect yourself when air quality drops

Install an air filter in your home.

Close your windows and turn on the AC.

Shower or bath after being outside.

Wear a face mask.

Stay indoors when conditions are particularly poor.

If driving, turn your engine off when stationary.

Russia's Muslim Heartlands

Dominic Rubin, Oxford

Results

5pm: UAE Martyrs Cup (TB) Conditions Dh90,000 2,200m

Winner: Mudaarab, Jim Crowley (jockey), Erwan Charpy (trainer).

5.30pm: Wathba Stallions Cup (PA) Handicap Dh70,000 1,400m

Winner: Jawal Al Reef, Richard Mullen, Hassan Al Hammadi.

6pm: UAE Matyrs Trophy (PA) Maiden Dh80,000 1,600m

Winner: Salima Al Reef, Jesus Rosales, Abdallah Al Hammadi.

6.30pm: Sheikha Fatima bint Mubarak (IFAHR) Apprentice Championship (PA) Prestige Dh100,000 1,600m

Winner: Bainoona, Ricardo Iacopini, Eric Lemartinel.

7pm: Sheikha Fatima bint Mubarak (IFAHR) Ladies World Championship (PA) Prestige Dh125,000 1,600m

Winner: Assyad, Victoria Larsen, Eric Lemartinel.

8pm: Sheikh Zayed bin Sultan Al Nahyan Jewel Crown (PA) Group 1 Dh5,000,000 1,600m

Winner: Mashhur Al Khalediah, Jean-Bernard Eyquem, Phillip Collington.