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Kuwaiti retail prospects remain strong in long-term
June 2, 2015, 4:26 pm
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A report released by A.T. Kearney highlights a drop in Kuwait’s ranking in the Global Retail Development Index (GRDI), reflecting the short term effects of lower oil prices and the impact on the short-term economic outlook of the country. Although the current prospects have decreased, the report also points to the strength of the long-term outlook for the country. Retail sales are projected to grow by six percent annually through to 2020 largely driven by ongoing urbanization.

Luxury brands will also play a role in the long-term growth of the Kuwaiti retail sector. With a GDP of $44,000 per capita, Kuwait boasts one of the highest standards of living in the world. Underpinned by its high proportion of youth population, as well as its growing expatriate workforce, Kuwait remains a prime destination for luxury brands.

Shamail Siddiqi, Principal of the Consumer and Retail Practice, A.T. Kearney Middle East, stated: “As a result of the drop in oil prices, the past year has seen a more cautious approach to international expansion into some developing markets. However, many retailers are taking a longer-term view and look for more targeted investments in areas of growth. We find that this is precisely the strategy many retailers are taking in Kuwait, where the long-term prospects are still competitive.”

The 2015 GRDI includes a special feature on the prospects for luxury goods in developing retail markets. Martin Fabel, Partner and Global Head of the Strategy Practice, commented: “Our work with consumer industries and retail clients show that retail sales growth is expected to continue. Luxury remains a relatively bright spot in emerging markets, as the wealthy have proven less vulnerable to economic woes than the general population.”

The feature includes an analysis of the 15 leading luxury brands and their presence in the GRDI’s top 30 countries. The analysis shows that emerging markets fall into three tiers of luxury development, with different implications for brands looking to enter or expand in these markets. Kuwait currently hosts 14 of the top 15 brands, indicating a strong local demand for luxury brands and an opportunity for luxury retailers to further penetrate the market.

Published since 2001, the GRDI ranks the top 30 developing countries for retail investment worldwide (see chart below). The Index analyzes 25 macroeconomic and retail-specific variables to help retailers devise successful global strategies to identify emerging market investment opportunities.

To read the full 2015 GRDI report, please go to www.grdi.atkearney.com.

 

2015 Global Retail Development Index Ranking

 

Country

2015 Rank

2014 Rank

Change

China

1

2

1

Uruguay

2

3

1

Chile

3

1

-2

Qatar

4

2015 new entry

N/A

Mongolia

5

2015 new entry

N/A

Georgia

6

7

1

United Arab Emirates

7

4

-3

Brazil

8

5

-3

Malaysia

9

9

0

Armenia

10

6

-4

Turkey

11

11

0

Indonesia

12

15

3

Kazakhstan

13

10

-3

Sri Lanka

14

18

4

India

15

20

5

Peru

16

13

-3

Saudi Arabia

17

16

-1

Botswana

18

26

8

Panama

19

14

-5

Colombia

20

21

1

Russia

21

12

-9

Azerbaijan

22

30

8

Nigeria

23

19

-4

Philippines

24

23

-1

Jordan

25

22

-3

Oman

26

17

-9

Kuwait

27

8

-19

Costa Rica

28

24

-4

Mexico

29

25

-4

Angola

30

2015 new entry

N/A

 

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