The National: Growth of luxury retail sector in the UAE to slow
ABU DHABI // Shoppers say they will continue to spend on luxury goods – even as experts forecast slower growth of luxury retail sales this year.
As the peak shopping season begins, with the shopping festival in Dubai and New Year sales across the UAE, experts said the retail sector would expand this year but at a slower rate than the previous four years.
Observers said retailers could begin to feel the impact of the strong dirham driving up prices for tourists, many of whom will also be affected by economic slowdowns in their home countries.
Shoppers, however, had mixed views.
Danish expatriates Kirsten and Lone browsed the shops at the high-end Galleria Mall on Al Maryah Island, each with a fashionable handbag on their shoulders.
They said they would continue to spend on luxury items. “We have been here for a lot of years and the prices have gone up and up, but you can find bargains,” said Kirsten.
The women said prices were a secondary consideration to the shopping experience on offer at Galleria Mall, which hosts brands such as Prada, Dolce and Gabbana, Ermenegildo Zegna and Burberry.
Z A, a Canadian teacher, said the cost of luxury goods in the UAE compared to those in Europe might also hamper retail sales.
She said she found more bargains during her recent visit to Berlin for instance.
While shopping in Abu Dhabi’s Marina Mall on Sunday, Z A said she was making direct comparisons of products at the mall with those in Germany. “I did a lot of shopping there and things were much cheaper,” she said.
S A, a fellow teacher, said now is the best time of the year to find bargains. “Everything is on sale, so prices are more reasonable,” she said.
Retailers, however, said they were expecting business to be slow outside of the sales season.
In Galleria Mall, Khabib Khosilov, a Sacoor Brothers store manager, said there had been fewer East Asian and Russian tourists browsing his shop in recent months.
He said a Russian tourist recently told him that the UAE’s tax-free status made prices lower but the declining Russian rouble was affecting his buying power.
“He used to buy Louis Vuitton and Gucci products but now he has to go a little down,” said Mr Khosilov.
David Macadam, chief executive of the Middle East Council of Shopping Centres, said he expected the number of tourists shopping in the UAE to remain firm this year. “You have three billion people within a five-hour flight. You’ve got great infrastructure here, you’ve got all of the things that people need, and the last part of the ingredients is the weather,” he said.
Mr Macadam added that the UAE’s strong infrastructure of airports, taxi services and road networks had been helping retailers to attract shoppers from Saudi Arabia, India and Iran.
“And people, when they do travel, they always shop,” he said.
By The National Staff
Link to Article: http://www.thenational.ae/uae/growth-of-luxury-retail-sector-in-the-uae-to-slow