Dubais Retail Industry Gets Set To Take On Challenges

Dubai: Dubai’s retail sector is hoping for a fresh growth spark with the setting up an industry grouping tied to the Dubai Chamber of Commerce & Industry. Some of the biggest retail network operators such as Landmark, Apparel, Al Tayer, Azadea and Chalhoub have signed up to be members.

While the focus is on brick-and-mortar operators, the Dubai Retail Group expects to bring on board souq.com and noon.com to give a true representative feel of the industry.

The Group will also not shy away from tackling some of the key challenges retail in Dubai has been facing, the representatives said. In particular, steep mall rents and how this impacts on mid-sized and smaller retailers will be in focus. The Dubai Executive Council and other relevant agencies such as Dubai Land Department will get to have a say in how a possible solution can be found, sources added.

 As long as the big retail groups take up 15-20 per cent of a new mall development, mall owners are not worried. But they have to think beyond these big retailers.”

 - Majid Saif Al Ghurair | Chairman of Dubai Chamber 

“No, high rents are not the No 1 concern in the local retail industry — for too long it had been used to double-digit growth rates,” said Maid Saif Al Ghurair, Chairman of Dubai Chamber. “Not sufficient thought was given to cost savings and these are things that need to change immediately.

“As long as the big retail groups take up 15-20 per cent of a new mall development, mall owners are not worried. But they have to think beyond these big retailers. It’s into the mid and small businesses that’s Dubai retail needs to look into.”

The launch of the new Group — Nilesh Ved of Apparel Group is its first chairman — thus represents a timely intervention on the part of Dubai’s government agencies. (In fact, there was an earlier Dubai retail industry grouping formed in the early part of the last decade. But those were different times and Dubai Chamber officials said the new version reflects the new realities in the industry.) A project has been initiated by the Dubai Chamber that will have real-time tracking of customer data collected through point-of-sales across the emirate. This will be the building blocks to creating a database that the retail industry can track to log changes in trends and buying patterns.

Part-timers

According to Khalil Haddad, Director — Strategy & Corporate Development at Dubai Chamber, the database initiative should build up sufficient traction by the third quarter of 2018.

“We will look into all of the challenges, including whether there are any existing legislations that hinder retail growth,” said Haddad.

On whether it would consider part-timers to take on retail jobs, Haddad said: “It could be looked at, but in line with federal rules and whether the changes can apply to other industries as well.” Dubai’s current mall projects will add a few million square feet of new leasing capacity in the next two to three years. The next big one would be the Nakheel Mall on the Palm, and another mega-mall coming offshore would be the Deira Mall and its 4 million square feet of GLA. And even existing malls in Dubai keep adding on — The Dubai Mall opened up its Fashion Avenue earlier this week with 150 outlets.

According to Khalid Al Tayer of Al Tayer Insignia, “The Dubai Retail Group’s launch sets up the framework for organisations to work on behalf of the industry. It’s the first step for Dubai to continue to be among the top retail destinations in the world.”

Dubai Chamber officials said pure-play online retailers could be part of this grouping. And whether these retailers needed another grouping of their own would be for the future to decide.