UAE retailers registered a 4 per cent quarterly increase in consumer spending in the second quarter amid signs of growth in the country's retail sector could reach pre-pandemic levels before the end of 2020, according to the Middle East and North Africa's largest mall operator Majid Al Futtaim.
The quarterly increase in consumer spending this year was even higher than the 3 per cent registered during the same period in 2019, MAF said.
Consumer spending in retail during the first half of 2021 was down 3 per cent when compared to the corresponding period in 2019, as leisure, entertainment, fashion, and luxury spending were hit hardest by the pandemic-induced slowdown.
Looking back over the past six months, we continue to see positive trends across the UAE retail economy
Alain Bejjani,
CEO at Majid Al Futtaim Holding
"Looking back over the past six months, we continue to see positive trends across the UAE retail economy, and in some sectors significant progress in returning to pre-pandemic levels," Alain Bejjani, chief executive at Majid Al Futtaim, said.
"We see this cautious optimism strongly driven by the robust vaccination measures taken by the UAE government and local health authorities, which has served to protect our communities and provided additional confidence both here and abroad."
The retail, tourism and aviation sectors were the hardest hit globally as pandemic-linked movement restrictions led to the closure of malls and other establishments for months. But the UAE, which has one of the highest vaccination rates in the world, has recovered strongly over the past few months.
Majid Al Futtaim, which tracked card spending across point of sales machines and measured footfall across malls to assess the growth of the sector, said the growth in retail economy is bordering on 2019 levels this year, with consumer spending up 0.2 per cent.
Growth in spending also comes as consumers become increasingly comfortable visiting shopping malls, according to the report.
Nearly half of the shoppers polled by the retailer in its Happiness Lab survey said they were comfortable going to malls with children.
"During the first three months of 2021, there were early signs that confidence was returning to the retail economy. The second quarter of 2021 has seen a continuation of that cautious optimism and encouraging signs that it is growing stronger," the report said.
Consumer behaviour is approaching pre-pandemic normality but it is "continuing to deviate from pre-Covid-19 patterns", the mall operator said. For example, people were spending less on fashion during the second quarter this year compared to the corresponding period in 2019. But spending was up five per cent quarter-on-quarter this year.
E-commerce sales continued to be a bright spot in the UAE's retail economy, growing 17 per cent in the first half of this year compared to the same period last year, according to the report. Online sales also accounted for 9 per cent of overall consumer spending in the UAE during the period.
The value of the UAE’s retail e-commerce market rose 53 per cent to a record $3.9 billion in 2020, largely driven by the digital shift in consumer shopping habits amid the pandemic, according to the Dubai Chamber of Commerce and Industry. E-commerce accounted for 8 per cent of the UAE’s overall retail market last year, the chamber said in a report in June.
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Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
First-round leaderbaord
-5 C Conners (Can)
-3 B Koepka (US), K Bradley (US), V Hovland (Nor), A Wise (US), S Horsfield (Eng), C Davis (Aus);
-2 C Morikawa (US), M Laird (Sco), C Tringale (US)
Selected others: -1 P Casey (Eng), R Fowler (US), T Hatton (Eng)
Level B DeChambeau (US), J Rose (Eng)
1 L Westwood (Eng), J Spieth (US)
3 R McIlroy (NI)
4 D Johnson (US)
THE CLOWN OF GAZA
Director: Abdulrahman Sabbah
Starring: Alaa Meqdad
Rating: 4/5
Results
2.30pm: Dubai Creek Tower – Handicap (PA) Dh40,000 (Dirt) 1,200m; Winner: Marmara Xm, Gary Sanchez (jockey), Abdelkhir Adam (trainer)
3pm: Al Yasmeen – Maiden (PA) Dh40,000 (D) 1,700m; Winner: AS Hajez, Jesus Rosales, Khalifa Al Neyadi
3.30pm: Al Ferdous – Maiden (PA) Dh40,000 (D) 1,700m; Winner: Soukainah, Sebastien Martino, Jean-Claude Pecout
4pm: The Crown Prince Of Sharjah – Prestige (PA) Dh200,000 (D) 1,200m; Winner: AF Thayer, Ray Dawson, Ernst Oertel
4.30pm: Sheikh Ahmed bin Rashid Al Maktoum Cup – Handicap (TB) Dh200,000 (D) 2,000m; Winner: George Villiers, Antonio Fresu, Bhupat Seemar
5pm: Palma Spring – Handicap (PA) Dh40,000 (D) 2,000m; Winner: Es Abu Mousa, Antonio Fresu, Abubakar Daud
DEADPOOL & WOLVERINE
Starring: Ryan Reynolds, Hugh Jackman, Emma Corrin
Director: Shawn Levy
Rating: 3/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
