In the past years, the MENA region has witnessed growth in the retail sector. Particularly, retailers in the Gulf Cooperation Council (GCC) region have benefited from a favorable macroeconomic environment. Grocery, apparel, electronics, and other retail segments have achieved profits and returns above the global industry average. Saudi Arabia had the
, with more than 16 billion U.S. dollars. The region accounted for around 1.3 percent of the
Retail sector outlook
In recent years, the region has undergone several challenges, namely the decline in oil prices, geopolitical instability, and the rapid evolution of digital technology, which have significantly slowed growth in many sectors including retail. However, a survey showed that more than
one-third of consumers believe that the retail industry is the ripest for digital change among other consumer industries. E-commerce accounted for a growing share of the retail sector over the years. By 2025, it is estimated that
e-commerce will have a penetration rate of 16 percent of the retail sector.
Shifts in consumer trends
The COVID-19 pandemic has shifted trends and lifestyles around the world and, the retail sector in MENA was no exception. The pandemic resulted in an urgent need for digital adoption among retailers to respond to changing consumer preferences towards online retail. More than half of consumers stated that they expect their
online shopping frequency to increase as a response to the pandemic. On a category level, more consumers are moving towards
increased online shopping in categories such as grocery, food, and beverages, while products such as shoes, apparel, and accessories witnessed a decline. The retail sector is expected to continue to evolve, largely due to a technology-led disruption where data analytics, artificial intelligence, machine learning, and changing consumer behavior will reshape the retail industry landscape to improve customer experience.
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