Dubai retail group to tackle challenges

Majid Saif Al Ghurair said big retailers always have the upper hand and they can dictate terms and conditions.

The retail sector in Dubai, especially SMEs, is expected to gain momentum after an industry body was established to further the industry's growth.

The Dubai Chamber of Commerce and Industry and 30 major local players established the Retail Business Group in order to overcome any challenges, especially related to high rents, which could be hampering the growth of small and medium players.

Khalid Haddad, director for strategy and corporate development, Dubai Chamber, said the group is currently discussing the issues faced by the industry with government departments and data providers to track real-time data of industry stakeholders which will help in better decision-making for retailers on customers' trends. This is expected to go live from Q3 2018.

The Retail Business Group is also holding talks with e-commerce players such as Souq.com and Noon.com to be part this influential group. Consisting of 30 players, this is the 29th sector-specific business group launched by the Dubai Chamber.

The UAE retail sector is forecast to expand by a CAGR of 4.9 per cent to reach $71 billion by 2021. Around 2 million square metres of retail space are currently under construction, with Dubai accounting for the majority of upcoming developments in the UAE.

The Retail Business Group is led by a steering committee which is joined by Al Tayer Group, Apparel Group, Azadea, Chalhoub Group, Dubai Duty Free, Giordano, Lals Group, Landmark Group and Seddiqi Holdings.

Majid Saif Al Ghurair, chairman of Dubai Chamber, said big retailers always have the upper hand and they can dictate terms and conditions because they are constitute 10 to 20 per cent of the malls.

"Every time a developer develops a small, the first thing he will do is to approach retailers. If the retailer doesn't show interest, it means he will fail in opening his development," he said, adding that "rents are a major issue but not the number one. Rent, charges, regulations, competition from e-commerce and human capital are some of the challenges faced by retailers. We want the retail sector to grow, especially SMEs."

He pointed out that retailers enjoyed double-digit growth for years but this can't be the case forever and they have to balance cost and growth rates.

The new group will coordinate the calendar of sale and promotions with Dubai Tourism, the Dubai Shopping Festival Office and the Department of Economic Development throughout the calendar year.

- waheedabbas@khaleejtimes.com