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United Arab Emirates Food and Drink Report Q2 2010
Market |
Food and Drink |
Report Type |
Market Research |
Country |
United Arab Emirates |
Published |
23 February 2010 |
Number of Pages |
55 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
File Format |
- |
The US$10bn bailout provided by Abu Dhabi's government to Dubai World's property arm Nakheel was unquestionably the quarter's headline event. Once thought to be fairly unaffected by the global downturn at the consumer level relative to much of the developed world, Dubai's stock plunged considerably over the H209 period (calendar year). Although weakness at the consumer level, a process that has been accentuated by the downturn's negative effect on the expatriate population, in Dubai in particular is likely to persist over the near-medium term, significant opportunities for growth remain as discussed in our recently published UAE Food & Drink Report for Q210.
Introducing headline food consumption forecasts this quarter, We believe that despite the downturn (with a notable emphasis on Dubai) impacting spending in 2009, significant room for growth remains. To 2014 we expect consumption to increase 23.1% to AED30.66bn. The UAE is divided into three distinct consumer groups: UAE nationals, high income expatriates and low-mid income expatriate labourers. All three segments are expected to contribute significantly to headline growth. UAE nationals and high income expatriates, drivers of the premiumisation wave up until 2009, will continue to figure prominently in driving the fast-paced structural development of the food industry.
Significant growth is anticipated in the UAE's expatriate labour pool, as emphasised by our forecast that the UAE's population will increase 18.8% to 5.7mn to 2014. Excluding Saudi Arabia, expected growth in the size of the UAE's population is almost without parallel in the Gulf region.
The UAE's mass grocery retail (MGR) industry remained in the news this quarter with the entry of French multinational operator Auchan. Auchan has partnered with the UAE's Retailcorp to launch its first hypermarket in Dubai. The launch, through the companies' established Hypercorp joint venture, is Auchan's first investment into the Gulf and the third by a French retailer, after investments by Carrefour and Géant.
According to Retailcorp's CEO, Graham Dreverman, Hypercorp is planning to launch 15 hypermarkets and 40 supermarkets across the Gulf region. It is important to note that while Dubai in particular has been severely weighed down by the global financial crisis, significant room for expansion still exists across the hypermarket and supermarket segments. With only two major hypermarket retailers present, Carrefour MAF and EMKE-owned Lulu, Auchan will look to take advantage of a forecast 33% increase in headline hypermarket sales to AED5bn.
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