Dubai’s Retail Industry Moves Away from Luxury
7 Apr
Dubai is known for its love of over-the-top luxury and conspicuous consumption, with new buildings and shopping malls being built as fast as the emerging economy can muster. Dubai is thought to be home to around a quarter of the world’s construction cranes, a potent symbol of the growth of the richest of the UAE’s emirates. That fact that Dubai built the world’s tallest building whilst many countries where trying to fend of a recession shows that they have some serious spending power.
The luxury super malls Dubai is famed for are reaching the end of their popularity, whilst they will still operate developers are making moves away from luxury retail. A decline in sales figures in 2009 has forced a re-think, retailers need to react quickly in order to capture the attention (and money) of shoppers. A drop in spending power caused by the global economic crisis has forced those in Dubai to shop smarter by looking for bargains and being less impulsive.
A recent report by real estate services firm Jones Lang Lasalle sums it up well:
Consumer shopping budgets have been reduced significantly. This represents a shift away from luxury driven retail. For retailers and mall owners, there is now heightened competition to aggressively capture shoppers’ interests and disposable income. For the remainder of 2010 and beyond, Dubai’s retail market is likely to see an increased emphasis on competitive pricing, creative marketing programs, convenience shopping and value for money… This trend is likely to result in the repositioning of both existing and new retail centers away from the previous focus on luxury brands towards value merchandising.
The 20% drop in retail sales in 2009 is expected to be regained over the coming year thanks to the new approach. A slower pace of expansion and smaller, more localized, shopping facilities should appeal to a larger segment of the population. It is important however that Dubai maintains its image as a place of excess, its reputation as a top tourist location depends on it. After all what is more likely to make you book a flight to Dubai, a super-mall with a ski slopes and a shark-filled aquarium or a budget shopping center like the one in your hometown? Dubai needs to find a balance between catering for the wealthy, the average man on the street and the tourist.



