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Boom period for retail sector in Kuwait

The growth witnessed in retail sector in Kuwait over the recent years are likely to continue, with high-end malls holding luxury brands proving popular among Kuwaitis, and as new outlets open their doors in new retail spaces. Further, Kuwaitis are ranked among the most affluent consumers in the GCC.

According to Analysts, the year 2014 will be strong year for Kuwait retail sector, with major international brands looking to boost their presence. New shopping centres, including The Gate Mall are planning to open for business, while other ventures such as The Avenues plan to expand.

Kuwait was ranked ninth globally in AT Kearney’s Global Retail Development Index 2013 survey, ranking up three places from 2012 and maintaining its number two position in the MENA region, behind the UAE. The improved ranking is due to steady economic growth, improved consumer spending and better representation of international retailers.

In the month of March, Marks & Spencers aiming to strengthen its foothold in the country opened a new 6700sq m store in Kuwait City. The store brings the total number of retailer’s outlets in the region to 26, and is operated by long-term Marks and Spencer’s franchise partner, the Al Futtaim Group. The retailer’s CEO, Mark Bolland said that the Middle East is a priority market for Marks & Spencer, and that the company plans to build its presence here.

Just a few weeks ago, Kuwait’s biggest hypermarket opened its doors in Dajeej, which is spread over 21,400sqm. The Lulu hypermarket will serve the expanding suburbs of Messilah, Mishref, Salwa and Jleeb Al Shuyoukh. The hypermarket is likely to host a number of established names, including Costa Coffee, Malabar Gold, Dunkin Donuts and Damas.

The company said it planned to open four additional outlets in Kuwait prior to 2016 as part of its GCC expansion strategy. Kuwait has the highest concentration of international retailers in the GCC, with luxury segment proving to be a major draw. Several high-end brands like Chanel, Burberry, Prada, Louis Vuitton and Christian Dior have occupied the Prestige district of The Avenues, as the third phase of the mall’s expansion completed a year ago. The extension made available an additional 100,00 sqm of space, which is sufficient to house about 400 shops.

The report said that Kuwait has at least 45 percent of population in the 20 to 39 age bracket, and it is natural that these young consumers are keen on spending on retail sector and malls, and in purchasing international brands. Kuwaiti women too do not generally wear abayas, and there is more open attitude towards fashion.

The fourth phase of ‘The Avenues’ expansion is in design stage and will include five-star hotels, shopping space, and multipurpose ballroom on completion.

Further, ‘The Gate Mall’, a six storey shopping centre under construction near the American University of Kuwait is another venture set to open during the coming months. On completion, the mall will include more than 275 shops, making it the second largest shopping centre in Kuwait.

The $142m Al Salam Mall project offers 26,680sqm of gross leasable area announced last September, with more than 70 percent of retail space leased. According to analysts, varied consumer tastes and heavy spending on quality brands are major drivers for high-end retail.

The young, wealthy customer base and penchant for luxury labels should ensure that demand continues to remain strong, paving way for further expansion.

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