UNITED ARAB EMIRATES: The Dubai shopping festival boosts quiet January sales but retailers say many customers are more cautious with spending than in previous years as shoppers look to save after months of instability in the global economy

Record ID: 786253

  • Title: UNITED ARAB EMIRATES: The Dubai shopping festival boosts quiet January sales but retailers say many customers are more cautious with spending than in previous years as shoppers look to save after months of instability in the global economy
  • Date: 18th January 2012
  • Summary: VARIOUS OF 'SALE' POSTERS IN SHOP WINDOWS CLOSE OF POSTER FOR DUBAI SHOPPING FESTIVAL (DSF) SHOWING WOMAN SITTING IN SPORTS CAR SURROUNDED BY SHOES/ ADVERT READS (Arabic): 'There is always room for more.' CLOSE OF POSTER ENCOURAGING SHOPPERS TO SPEND USING VISA CARD TO WIN TRIPS TO LONDON 2012 OLYMPICS VARIOUS OF CHIEF EXECUTIVE OFFICER AT 'DUBAI EVENTS AND PROMOTIONS E
  • Embargoed: 2nd February 2012 12:00
  • Keywords:
  • Location: United Arab Emirates, United Arab Emirates
  • Country: United Arab Emirates
  • Topics: Business,Arts / Culture / Entertainment / Showbiz,Industry
  • Reuters ID: LVA97303PAKC2359FJETRSLBWBAB
  • Story Text: Dressed in colourful costumes and wearing full smiles, performers danced around shopping centres entertaining customers who had turned out for the Dubai Shopping festival.
    An annual event, the Dubai Shopping festival has become a magnet for tourists and visitors and an important revenue generator for Dubai's economy. Daily light shows and fireworks along the Dubai Creek, night souks (markets) extending until after midnight, lotteries to win 19 kilos (42 pounds) of gold, and hotel promotions are features of the 32-day long festival for shopaholics.
    Now in its 17th edition, the festival started off in 1996 as a government initiative to promote retail sales and trade.
    "The Dubai Shopping Festival plays a major role in supporting the economy of Dubai and boosting it in various sectors, some sectors more than others," said Laila Suhail, chief executive officer for festival organiser Dubai Events and Promotions Establishment (DEPE).
    But amid a mammoth array of discounts, raffles and promotions at this year's festival, there are signs that consumers are becoming more value-conscious and thinking twice about spending after months of instability in the global economy.
    Retail workers said they remain positive that sales will pick up.
    "The momentum from December onwards it has been very positive and if you see the first few days of January I don't have the sales yet but if you see the footfall it has been very very positive, there are lots of tourists, lots of residents shopping, lots of shopping bags, so I am quite optimistic," said Fuad al-Najjar, asset director at the Deira City Centre, one of the major shopping centres taking part in the festival.
    In 2011, the contribution to Dubai's economy from retail, travel and hospitality spending in the emirate during the festival totalled 15.1 billion dirhams (4.1 billion U.S. dollars), DEPE figures showed, including 5.9 billion dirhams spent by regional and international shoppers. Total spending was equivalent to about five percent of Dubai's 2010 gross domestic product.
    According to Laila Suhail, four million visits were made to the festival in 2011, of which 884,660 were regional and international visitors, mostly from India, the United Kingdom and Saudi Arabia.
    Total spending may climb further at this year's festival, which runs until Feb. 5. Tourism has been strong -- passenger traffic through Dubai's international airport rose 8.9 percent year-on-year in November.
    Shop manager at the designer watch label Breitling at the Mall of the Emirates shopping centre, Hussain Kalmari, said sales were unpredictable but he expected a good turnover.
    "We are expecting this month about 20 percent increase will be there, because the starting was good so we don't know what will happen in next few months, you can't expect the sales, but compared to last year this month was a good one."
    But while overall sales may rise this year, there are indications that many individual consumers may be less free-spending and hold out for better bargains.
    Rose Sebuco, a sales assistant at Vipera, a Polish cosmetics and skin care brand, said: "This year, it is a little quieter compared to last year, last year we saw a lot of Russian customers and a lot of expats from Saudi and Kuwait but nowadays, I think it is really quiet, as you can see, you can barely see women wearing Abayas," referring to the traditional black dress women from the Gulf wear.
    Traditionally organisers have targeted a Gulf customer base for marketing, but this year particular attention has been paid to appeal to Chinese tourists whose visits to the region have increased.
    "We focus in our marketing campaign on Gulf countries, who make up our biggest market, following that comes the Asian and European markets, in addition to this we have focused this year on China considering the importance of the Chinese market to tourism in the Middle East and more specifically to Dubai," DEPE's Suhail said.
    Shoppers have become more savvy when spending money, according to Suhail who says that retailers these days need to work much harder to lure costumers into spending.
    While the economies of Dubai and the Gulf in general are growing strongly, buoyed by high oil prices, they may be slowing. Analysts polled by Reuters in December forecast the overall UAE economy would grow by 3.1 percent this year, after an estimated 3.9 percent in 2011.
    With the euro zone debt crisis still unresolved, companies and consumers in the Gulf, like elsewhere, have been subjected for months to a drumbeat of negative news from Europe. Banks from Europe have been pulling out of business in the Gulf to strengthen their balance sheets back home.
    The threat of international conflict over Iran's disputed nuclear programme may also start to worry consumers. Dubai residents have lived with the issue for years and many have learned to ignore it, but with Iran just 150 kilometres (100 miles) across the Gulf, it could become a factor in spending decisions.
    Dubai is vulnerable to any slowdown in wholesale and retail trade because those sectors contributed around 30 percent of the Emirate's 2010 GDP, data from the Dubai Statistics Centre showed, higher than in many other cities worldwide. Dubai's GDP accounts for about 28 percent of the UAE's economy
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