Retail spending in the GCC is projected to increase by 37% from 2022 levels, reaching $300 billion by 2028. Cities in the region are emerging as top global shopping destinations, with Dubai leading the way.
Dubai is the only GCC city among the six top global retail destinations, including London, Milan, New York, Seoul, and Tokyo. These cities have significant direct retail spending per capita, ranging from $8,000 to $18,000 annually. Their retail sectors contribute up to 24% to urban GDP and employ up to 20% of the urban workforce, bolstering the overall reputation of their cities. This is according to a report titled “Shopping for growth: how to build an urban retail destination” by Strategy& Middle East, part of the PwC network.
With a retail spend per capita of around $14,000, Dubai ranks second only to New York City in terms of consumer expenditure. Approximately 21% of Dubai’s workforce is employed in the retail sector, the highest proportion among the six leading cities. This sector also contributes a remarkable 24% to the city’s urban GDP.
In 2021, retail sales in the UAE were estimated at around $74 billion. By 2026, retail sales are forecasted to reach approximately $114 billion.
The Middle East retail market size is projected to exhibit a compound annual growth rate (CAGR) of 4.21% during 2024-2032. Factors driving this growth include changing demographics, population growth, aging populations, and cultural shifts impacting consumer preferences and buying patterns.
“As the GCC member states pursue urban transformation and mega projects, they should seize the unrealized opportunity for growth in the retail sectors of their major cities. The region’s annual retail sales are expected to grow to $300 billion by 2028, a 37% increase from 2022. With the right steps, these retail sectors can become global shopping destinations,” said the report.
This transformation will allow retail to make a significant contribution to urban GDP and employment, improve quality of life for residents, and enhance offerings for tourists. “The prospect of strong domestic retail growth, however, does not guarantee that GCC cities will become global shopping destinations. Indeed, the opposite could occur. Given the ease of foreign travel, rising GCC domestic demand could result in GCC shoppers seeking unique retail experiences outside the region,” the report added.
The UAE supermarket retail sector has seen significant growth and transformation over the past few years. In 2023, the retail market was worth $30.17 billion, with a projected CAGR of 6.2% through 2029, according to retail industry analysts.
In 2024, the retail market continues to thrive, driven by rapid urbanization, an expanding expatriate population, and increasing demand for convenience. The market, encompassing hypermarkets, supermarkets, and online grocery platforms, has become a cornerstone of the UAE’s retail landscape. With ongoing investments in retail infrastructure and the adoption of digital technologies, the future of supermarkets in Dubai and the wider UAE looks promising.
Hypermarkets and supermarkets dominate the retail sector, accounting for approximately 85% of total consumer spending. E-commerce, while growing rapidly, still represents about 15% of the market but is the primary driver of recent growth.
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