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DUBAI’S FOOD & BEVERAGE SECTOR ATTRACTIVE FOR INVESTMENTS AMID INCREASE IN CONSUMER SPENDING

The Retail Sector is one of the fastest growing sectors of UAE’s economy, contributing 12% to the country’s GDP at present. According to the Global Retail Development Index (GRDI), UAE is ranked as the fourth most attractive global market, with Retail Sales expected to reach AED 160 Billion ($43.6 Billion) by the end of 2015. Accounting for 40-42% of the total retail sales, Food and Beverage segment leads UAE Retail Sector.

A major contributor to this segment is Dubai, whose residents currently account for one fourth (2.3 Million) of the country’s total population (9.2 Million). As of 2014, the total spending by Dubai residents on Food Consumables accounted for AED 82 Billion ($22.3 Billion) as individual consumed tentatively 862 kg of food each year.

Moreover, research findings suggest that consumers in Dubai are willing to pay higher price for Food Consumables, given that the service and quality provided is Top-Notch. It comes as no surprise that Dubai residents enjoy the second highest Disposable Income Per Capita in the GCC region, estimated to be at AED 46,075 ($12,543). This results in higher consumer spending on Food Consumables and greater margins for retailers in the Food and Beverage Sector.

In addition to residents, overwhelming tourist inflow also results in an increased demand for Food Consumables in Dubai. At present, Dubai is the fourth most visited destination in the world, receiving 14.26 Million visitors in 2014. Since Dubai expects to welcome 20 Million visitors by 2020 in anticipation of the EXPO, significant amount of investments will have to be made in the Food and Beverage Sector to support the increased demand emerging from not only the tourist inflow but also from other sectors, such as Real Estate, Hospitality and Logistics.

Another factor driving the growth of Food and Beverage Sector in Dubai is the diverse demographics, that prefers to dine out at least once a week and spend spend of AED 850 (USD 231) on restaurant meals per month, which is the highest in the Middle East market. As a result, there is variance in the consumer’s food preferences, which has led to the emergence of new market segments. Needless to say, Dubai’s population growth coupled with overwhelming tourist inflow will continue to drive the growth of Food and Beverage Sector, especially in anticipation of EXPO 2020 which will trigger massive demand for food consumables in the Emirates.


Research Konnection – This Research Report is compiled by Team Research Konnection; A Dubai Based Market Research Firm that specializes in Retail Sector Research and Feasibility Study. If you are looking for more detailed analysis on UAE’s Retail Sector or want us to help you in market research or to prepare business plan / feasibility study, then feel free to konnect with us on info@researchkonnection.com

Author: RKonnect
The author is the Managing Director of Research Konnection, a Dubai based market research and consulting firm that helps local and international companies to identify emerging business opportunities and successfully expand in the Gulf region. The author can be reached at waqas@researchkonnection.com
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