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Positive Trends in Spending Seen

The food retail segment represents the largest segment within the UAE retail sector and accounts for more than 40 per cent of total consumer retail spending, according to A.T. Kearney, one of the world’s leading management consulting firms.

Dubai in particular is seeing positive trends in spending largely due to Dubai Summer Surprises, an annual event in the emirate, with participating malls experiencing increases in footfalls and retailers reporting positive sales. It is expected that food retailing will remain high through the month of Ramadan.

Expert retail analyses indicate that the bottomline can be improved through focused integrated store operations, presentation, assortment and promotions, according to A.T. Kearney.

“While it is key for retailers to find innovative ways beyond price discounts to keep driving sales beyond Ramadan, store operators can benefit from simultaneously considering opportunities to increase the bottomline of food retailing,” A.T. Kearney Middle East Vice-President Robert Ziegler said in a statement.

“Key success drivers for retailers to sustain sales and bottomline performance can be found by digging deep into stores’ operational excellence and merchandise productivity,” Ziegler said.

A.T. Kearney assesses that food retailers can realise a 35-50 per cent margin improvement by adopting an integrated store operations framework, with effective presentation, assortment and promotion tactics. There are three elements to an integrated store operation approach which will allow retailers to generate margin growth.

The first element of the integrated approach focuses on assortment, pricing, placement and promotion. “Retailers have to review their category roles, adapt the Consumer Decision Tree and change the final shelf plan accordingly,” recommended Christian von Tschirschky, principal at A.T. Kearney Middle East.

abdulbasit@khaleejtimes.com