Jumbo Electronics reported a 10 per cent jump in footfall in its shops across the country during Christmas week as retailers look forward to another month-long shopping binge.
Dubai Shopping Festival (DSF), which starts on Thursday, is also expected to be a major draw for retailers as they slash prices to tempt even more shoppers through their doors.
“It is too early to comment on sales numbers for next year, but we do expect positive growth in the consumer electronics market through the year,” said Nadeem Khanzadah, the head of omnichannel retail at Jumbo Group.
“At Jumbo, we expect to see sales revenues rise by 20 per cent during DSF 2015 compared to last year, with smartphones, tablets and laptops likely to emerge as the top performing categories.”
Growth across the hospitality, entertainment and retail sectors, as well as positive consumer sentiment and easier access to brands online, are expected to be the major drivers for the industry this year, according to Anurag Bajpai, a partner at the consultancy KPMG for the lower Arabian Gulf region.
“This is expected to positively impact consumer buying next year, and we expect that seasonal peaks in retail sales will continue with events such as the Dubai Shopping Festival and the Dubai Summer Surprises,” he said.
“We expect that fashion, including apparel, and technology, including wearable technology like watches, smart devices and gaming consoles, will continue to drive the momentum of the retail sector next year.”
At last year’s DSF, UAE residents and international visitors spent US$1.5 billion with their Visa cards. Of that, $578 million came from overseas travellers.
The most popular spending segments for the shoppers were clothing, retail and accommodation. Those from Saudi Arabia and the United Kingdom accounted for the majority of the spend, at about $77m and $47m, respectively.
But unlike in the US and Europe, the falling price of oil is not expected to have an immediate effect on spending in the region.
“Countries such as the UAE, Saudi Arabia, Qatar and Kuwait have run up significant surpluses and reserves in the past few years when oil prices were high, and would be able to ride out a medium-term fall in the prices without significantly affecting their public spending,” said Mr Bajpai.
A fall in the oil price is expected to have a favourable impact on the economies of some of the oil-importing economies such as India and China, and could lead to higher outbound tourism, including to the UAE.
“While the retail sector in the UAE should be cautious about falling oil prices, I don’t expect we will see any drastic drop in visitor numbers,” he said.
Globally, more affordable petrol prices in the United States – the cheapest in five years – are leading a retail recovery during the holiday season. Retail and food sales were estimated at $449.3bn in November, an increase of 5.1 per cent year on year, according to the latest US Census Bureau data. The National Retail Federation forecast retail sales would increase 4.1 per cent during November and December – the biggest jump since 2011 – to touch $617bn.
Dubai’s retail sector sales turnover is expected to reach $41.6bn this year, up from $39.6bn in 2013, an increase of 5 per cent, according to a study from Emirates NBD Research and consultancy AT Kearney in June. Turnover could reach $43.7bn next year.
Al Zarooni group, which owns Mercato shopping mall in Jumeirah, is planning a shopping mall in Karama, according to Abdul Al Zarooni, the chairman of Al Zarooni Group. The company is one of the sponsors of DSF.
An expansion of Mercato is also on the cards. The group expects to launch six projects across the retail, real estate and hospitality sectors.
ssahoo@thenational.ae
Follow The National's Business section on Twitter
