Dubai’s booming retail industry: A look at numbers and statistics

Over the past few years, Dubai has significantly contributed to the growth of the retail industry in the UAE and has emerged as a leader in the regional industry. With a series of strategic initiatives and government support, Dubai has been propelling the overall national retail industry growth.

Growth and development of Dubai’s retail industry

As of 2021, the retail market in the UAE was valued at a substantial USD 56.6 billion. Encouragingly, experts forecast that this market will continue to expand steadily, projecting a Compound Annual Growth Rate (CAGR) of around 4.5% from 2022 to 2027.

At the opening of The Retail Summit 2023 in Dubai, Abdul Aziz Al Ghurair, Chairman of Mashreq and Director of the Abdullah Al Ghurair Group, shared some impressive figures that highlight the city’s thriving economy. In the first nine months of 2022, Dubai’s economy witnessed a remarkable expansion of 4.6%, reaching a whopping AED307.5 billion. What’s even more astonishing is that the retail sector contributed a significant 24.1% to this growth, solidifying its position as a key driver of the economy.

This strong performance of the retail industry can be attributed to a multitude of factors, one of which is the influx of tourists. In 2023 alone, Dubai welcomed more than 14.5 million tourists, creating a vibrant atmosphere and further bolstering the growth of the retail sector. Moreover, the retail sector has witnessed a significant increase in employment opportunities, with over 250,000 jobs created in the industry.

By the end of 2027, the retail market in the UAE is anticipated to soar to an impressive USD 70.5 billion.

Dubai’s government initiatives for Dubai’s retail industry

It is apparent that a significant catalyst behind Dubai’s retail success story is the UAE government’s visionary economic stimulus package. This Dh50 billion three-year stimulus package has provided much-needed impetus to the retail sector, fostering an environment conducive to growth and investment. Furthermore, the government’s efforts to ease visa restrictions have attracted a steady influx of tourists and expatriates, further fueling demand for retail products and services.

The environment is conducive on various levels. Despite facing macroeconomic challenges and a global economic slowdown, the GCC’s retail sector has defied the odds, witnessing remarkable growth of about 22%. Projections indicate that this sector will achieve a staggering value of USD 308 billion in 2023, with both the UAE and Saudi Arabia spearheading sales over the next five years.

Consumer behaviour and shopping trends in Dubai

With its opulent shopping malls and high-end boutiques, Dubai alone captures a staggering 30% share of the region’s luxury market, making it a prime destination for luxury enthusiasts. A study conducted on UAE citizens revealed that they allocate approximately 30% of their monthly salaries towards indulging in luxury goods. This statistic showcases the immense appetite for luxury among the locals, further solidifying Dubai’s status as a prominent player in the luxury sector.

Additionally, with the UAE recently ranking eighth in a list of countries where consumers are upgrading from mid-market brands, it is clear that the demand for luxury items is on the rise. This trend presents a lucrative opportunity for businesses that wish to tap into the UAE’s thriving luxury market. Furthermore, establishing an international brand in Dubai can provide a distinct advantage, given that foreign products dominate a substantial 58% of all purchases made in the UAE.

This favorable market dynamic emphasizes the receptiveness of UAE consumers towards global brands, making it an ideal environment for businesses seeking to expand their luxury offerings. 

Dubai as the preferred destination for retailers and shoppers

Dubai’s strategic location and business-friendly environment have made it a preferred destination for retailers and shoppers alike. The Arabian Gulf retail sector, which recorded USD 253.2 billion in 2018, is anticipated to maintain a healthy CAGR of 4% until 2023. Notably, the UAE and Saudi Arabia, as the two largest economies in the Arab world, are expected to contribute significantly to this growth, accounting for approximately 77 percent of sales in the next five years.

It is worth noting that in 2019, a study conducted by Euromonitor International projected substantial growth in retail sales across four Gulf countries. The UAE was at the forefront of this positive trend and was expected to witness an impressive growth rate of 16%. Dubai’s flourishing retail landscape, with its iconic shopping destinations and diverse offerings, was a major factor in driving this projected surge.

Overall, it can be said that Dubai’s retail industry has become a symbol of prosperity and innovation, playing a pivotal role in shaping the overall national retail landscape in the UAE. With the market set to grow steadily in the coming years, Dubai’s strategic initiatives and government support have positioned it as a key driver of this remarkable expansion.

As the GCC’s retail sector continues to flourish, Dubai’s status as a global retail hub is expected to solidify further, attracting tourists and investors from all corners of the world. The future looks bright for Dubai’s retail industry, and its growth trajectory promises to leave a lasting impact on the region’s economic prosperity.

Image source: www.visitdubai.com/en/things-to-do/itineraries/shopping-scene-in-dubai