A forecast 10 per cent spike in visitors should help UAE retailers meet sales targets for the Eid holiday period, a key driver for overall annual performance, industry experts said.
Shopping malls will operate extended hours and retailers will stock new lines and discounts on older items.
This month, during what can be up to a two-week holiday for some parts of the Arabian Gulf region, outlets at major malls will stay open until 1am on weekdays and 2am on weekends.
“Tourist arrival numbers are expected to increase in 2014 by roughly 10 per cent, with the majority of arrivals expected from Saudi Arabia, followed by Qatar, Kuwait and Oman, as [the] UAE is known to be the Middle East hub for all festivals and religious occasions,” said Fatemah Sherif, a senior retail analyst with Euromonitor International. “We expect a high number of visiting families to roam the shopping malls in Dubai in search of offers and discounts. In the past retailers in Dubai attempted a 24-hour opening strategy in the malls, which was not very cost-effective. It was thought of as an extra cost to the shop owners and mall operators.”
The overall take for both Eid holidays can account for up to 20 per cent of yearly earnings, said Eisa Adam Ibrahim, the former general manager of the BurJuman mall in Dubai.
“On an annual basis the two Eids probably account for 10 to 15 per cent, probably 20 per cent, of annual sales depending on what sector you are in,” said Mr Ibrahim. “Retailers plan for months ahead to ensure that the new fashions, products and lines are on sale as Eid hits. The old collections will be on sale. You have a mass of visitors looking to enjoy the brands they cannot get at home and elongated shopping hours to keep the people in the malls for entertainment and food and beverage.”
According to the consultant AT Kearney, UAE retail sales increased five per cent last year to US$66 billion.
This year’s Eid in Dubai shopping festival runs until Saturday.
While the tourist season gives a fillip to the retail environment, it also provides opportunities for malls to increase footfall and food and beverage purchases. However, the longer hours do not always mean bigger sales.
“The elongated hours provide entertainment for tourists, guests and locals who really want to get out and spend time with their families and friends, so you are extending the dwell time of the people in the malls,” said David Macadam, the chief executive of the Middle East Council for Shopping Centres. “Do longer hours encourage sales? Generally yes, but it is hard to quantify when it is later at night because that translates into F&B sales, not merchandise, so you sell a lot of cake and coffee but little else.”
ascott@thenational.ae
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