Saudi Arabia Retail Sector Overview - June 2010

Garnering a robust share of 10 percent in the GDP, the Retail sector in the Kingdom of Saudi Arabia is poised to be the largest and fastest growing market in the Middle East and North African territory. The Kingdom of Saudi Arabia is the largest and fastest growing retail market in the Middle East and North Africa (MENA) region. The US$ 0.37 billion economy is home to the world’s richest population with large disposable incomes, a large proportion of fast urbanizing population that are young and whose tastes are predominantly influenced by global fashions and modern gadgetry such as satellite television.

The fast changing retail market is witnessing a plethora of changes from the traditional mom and pop stores to the growth in supermarkets and hypermarkets, as consumer preferences shift to greater awareness of brands. The cost consciousness of consumers in the kingdom has also led to the growth of private labels and supermarkets have offered consumers value for money, leading to a mushrooming growth of this retail format in the kingdom.

While the global economic slowdown in 2009 had mixed effects on the countries across the Middle East, the Kingdom of Saudi Arabia (KSA), despite the contraction in its GDP, emerged as a buoyant economy in terms of retail growth and attractiveness for global investors.

Adding to these inherent macroeconomic drivers to the growth of the industry, the country is also the traditional hub of religious tourism, housing two of the world’s largest shrines, Mecca and Medina, which further add fillip to the growth of retail spend per capita in the region. Retail expenditure per capita in the Kingdom grew from US$ 1,825 in 2005 to US$ 2,439 in 2009. Food and grocery, Apparel, Automotive and Furniture have been the major recipients of this increased spending.

Ventures Middle East with its vast experience on up to date tracking of projects across industries and countries in the Middle East has aimed to explore the main areas of growth in the retail market and the prime forces driving the growth of this emerging retail market in the MENA region and also outline the main restraints to the growth of the market over the coming years.

Key Highlights of the study includes a probability impact matrix of the drivers and restraints, a competitive overview of the retail sector in KSA besides providing detailed and vital statistics on retail revenues.