The size of the GCC retail sector is expected to grow by 25 percent, from $250.5 billion (AED919.33bn) in 2016 to $313.2bn (AED1.15 trillion) by 2021, driven by economic and population growth, and increase in tourist arrivals, according to a new report.

Alpen Capital, in its GCC retail industry 2017 report, said after witnessing a decline in 2016, retail sales are likely to grow at a slower pace in this year due to the prevailing economic environment such as lower oil prices and government-initiated austerity measures.

“Nevertheless, the sector is expected to recover in 2018 and grow steadily through 2021 driven by the anticipated rise in population, international tourist arrivals and per capita income,” it said.

During the five-year period, total retail sales in the GCC nations are projected to grow by 3.3 percent to five percent with Saudi Arabia and Bahrain growing the fastest.

“The GCC retail sector continues to remain an active contributor to the region’s economic development. Although the sector is experiencing a slowdown, the long-term fundamentals of the sector remain strong and are expected to grow steadily through 2021,” Sameena Ahmad, managing director, Alpen Capital (ME) Limited, said.

The consultancy said the GCC is expected to get 6.2 million square metres (sqm) of retail space is in the next five years, taking total retail gross leasable area to 18.6 million sqm.

♦ Arabian Business