A top retailer has warned rent hikes in some malls have become unsustainable as more shoppers move online.
It comes as traditional retailers face increased regional competition from global e-commerce players like Amazon.
“Mall operators need to be careful about their charges because there is a point when we look at our operating costs and if online makes more sense then we will leave,” said Anthony Chalhoub, the co-chief executive of the Chalhoub Group, which runs more than 600 outlets across the Middle East and employs more than 11,000 people.
The group, which focuses mainly on the premium and luxury segments, closed more than 50 stores last year – or double its normal churn.
It is now moving boosting its investment in digital channels.
“Some malls just became so expensive that we moved,” he said on Sunday at the launch of a white paper on the retail sector. “Others had changed their clientele so were not appropriate for our brands any more. I think the digital realm is still insignificant versus the bricks-and-mortar offerings in the UAE and Middle East. The US malls did not react until online was about 12 per cent of the retail offering. Now there are many empty retail spaces in the US.”
About 350,000 square metres of retail space is scheduled for release in Dubai this year with another 367,000 sq metres listed for completion in 2018, according to JLL data.
Although retail vacancies grew by only 1 per cent in the fourth quarter last year to 9 per cent, there are concerns that a rapid increase could lead to a glut of retail space in the short term.
Amazon.com, the world’s biggest online retailer, recently bought Souq.com, the region’s largest online retailer.
JadoPado, a local e-commerce platform, was last week acquired by a regional bricks-and-mortar retailer and Mohammed Alabbar’s online portal, Noon.com, is late-out-of-the-gate for its January launch but promises to carry 20 million products eventually.
“The disruption in the retail space is frightening,” said Patrick Chalhoub, the co-chief executive of the Chaloub Group. “The online world is taking a huge investment from ourselves and other players putting the customer at the very centre of the retail experience. While our revenues were only US$200 to $300 million online in 2016, we believe this will be $1.9 billion in 2020.”
He said the Chaloub Group had a flat year of growth in 2016 and believed that would hold for 2017.
For smaller online players the region offers an opportunity for exponential growth as internet penetration, social media access and mobile connectivity improves.
“We have grown 100 per cent every year since we launched in 2011,” said Kunal Kapoor, the chief executive of The Luxury Closet, an online luxury boutique. “We now have 17,000 products on our site, but it is not an easy sell. Marketing the platform and ensuring those that may be interested to know you are there is a tough job. E-commerce is not an easy pitch, you have to constantly strive.”
ascott@thenational.ae
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CHINESE GRAND PRIX STARTING GRID
1st row
Sebastian Vettel (Ferrari)
Kimi Raikkonen (Ferrari)
2nd row
Valtteri Bottas (Mercedes-GP)
Lewis Hamilton (Mercedes-GP)
3rd row
Max Verstappen (Red Bull Racing)
Daniel Ricciardo (Red Bull Racing)
4th row
Nico Hulkenberg (Renault)
Sergio Perez (Force India)
5th row
Carlos Sainz Jr (Renault)
Romain Grosjean (Haas)
6th row
Kevin Magnussen (Haas)
Esteban Ocon (Force India)
7th row
Fernando Alonso (McLaren)
Stoffel Vandoorne (McLaren)
8th row
Brendon Hartley (Toro Rosso)
Sergey Sirotkin (Williams)
9th row
Pierre Gasly (Toro Rosso)
Lance Stroll (Williams)
10th row
Charles Leclerc (Sauber)
arcus Ericsson (Sauber)
THE SPECS
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Cricket World Cup League Two
Oman, UAE, Namibia
Al Amerat, Muscat
Results
Oman beat UAE by five wickets
UAE beat Namibia by eight runs
Fixtures
Wednesday January 8 –Oman v Namibia
Thursday January 9 – Oman v UAE
Saturday January 11 – UAE v Namibia
Sunday January 12 – Oman v Namibia
Springtime in a Broken Mirror,
Mario Benedetti, Penguin Modern Classics
Scoreline
Al Wasl 1 (Caio Canedo 90 1')
Al Ain 2 (Ismail Ahmed 3', Marcus Berg 50')
Red cards: Ismail Ahmed (Al Ain) 77'
MATCH INFO
Uefa Champions League final:
Who: Real Madrid v Liverpool
Where: NSC Olimpiyskiy Stadium, Kiev, Ukraine
When: Saturday, May 26, 10.45pm (UAE)
TV: Match on BeIN Sports
Killing of Qassem Suleimani
Day 3 stumps
New Zealand 153 & 249
Pakistan 227 & 37-0 (target 176)
Pakistan require another 139 runs with 10 wickets remaining
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
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Florence and the Machine – High as Hope
Three stars
Score
Third Test, Day 2
New Zealand 274
Pakistan 139-3 (61 ov)
Pakistan trail by 135 runs with 7 wickets remaining in the innings
The specs
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Transmission: Single-speed automatic
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The specs: 2018 Genesis G70
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Engine: 3.3-litre, turbocharged V6
Gearbox: Eight-speed automatic
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Fuel economy, combined: 10.6L / 100km
Dr Afridi's warning signs of digital addiction
Spending an excessive amount of time on the phone.
Neglecting personal, social, or academic responsibilities.
Losing interest in other activities or hobbies that were once enjoyed.
Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.
Experiencing sleep disturbances or changes in sleep patterns.
What are the guidelines?
Under 18 months: Avoid screen time altogether, except for video chatting with family.
Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.
Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.
Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.
Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.
Source: American Paediatric Association