Retail sector major contributor to GDP

DUBAI — The retail sector in the AGCC region is a major contributor to the region's GDP. Approximately 3.8 million square metres of retail space has already been completed in the region with 2.2 million square metres is under development, however, overall potential is around 9.4 million square metres, according to a survey.

By Moushumi Das Chaudhury

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Published: Thu 14 Apr 2005, 10:27 AM

Last updated: Thu 2 Apr 2015, 4:01 PM

A major development that has impacted the regional retail industry as a result of this expansion in retail space is the intensification of competition among retailers.

Piyush Mathur, managing director of ACNielsen, one of the leading market researcher, said: "The large retailers, hypermarkets and supermarkets in the region have increased retail space by 40 per cent. Large groceries made expansion by 46 per cent and pharmacies extended the space by 18 per cent in the past five years at the expense of small stores while capturing up to 80 per cent of the money spent by shoppers in large cities in the region."

He was addressing a Press conference yesterday at Emirates Towers and revealed the study done on shopper marketing solutions and trends, its industry-leading retailer equity measurement service in the region and highlighted that 'ShelfSpace' competes with 'MindSpace' in the evolving retail environment.

"Shopper Marketing is a global trend making inroads in the Middle East," added Piyush.

"This is driven by a number of market trends emerging in the Middle East such as growth of private label, fragmentation of media, especially TV, and an increase in supermarket sales," he added.

He explained that manufacturers are actively reaching the shopper in-store, with their 'first impact'. "The phenomenon has begun in the Middle East and manufacturers wish to evaluate how their trade spending benefits them and are keenly interested in understanding their return on investment and that is where we come in."

According to Piyush Mathur, “Multinational companies spent millions of dollars for product promotion and to find out shopping behaviour and to improve sales." ACNielsen generated revenues around $2.3 billion in 2004 and has 9,000 clients worldwide reaching more than 82 per cent of the world's population, he claimed.

Shopper trends are a global study, which was conducted in 5 countries in the region including Saudi Arabia. It enables comparison with other retail markets around the globe and provides local insight as well as allows major grocery and supermarket retailers to accurately assess the impact of shopper attitudes on their brand equity, on the loyalty of their shoppers and on actual sales.

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