Skip to content

Dubai’s retail sector will continue its dominance over the next five years, with a compound annual growth rate of 5.2 percent over the period, supported by strong international visitor spending, robust demand fuelled by a high frequency of mega-sales and shopping festivals, and growing e-commerce activity, according to new analysis conducted by Dubai Chamber of Commerce and Industry.

Other key factors that are expected to fuel the growth of the sector in the medium term include the growing popularity of traditional and app-based delivery services, sector expansion ahead of Expo 2020 and an increasing number of tourists from China, Russia and other top source markets, following recent decisions to ease visa restrictions. According to the analysis by Euromonitor International, Dubai’s retail sector generated an estimated Dh142 billion in sales during 2018, marking a growth rate of 6.8 percent. Store-based retailing continues to dominate sales, accounting for a market share of 95 percent, while e-commerce continues to grow rapidly, with a 19 percent year-on-year growth and Dh5.5 billion worth of sales recorded in this segment.

The analysis reflected the strength and resilience of Dubai’s retailers, as well as the tremendous potential that the retail sector offers local, regional and international industry players. “Retail remains one of the main contributors to Dubai’s economy and one of the most attractive sectors for investment in the emirate. The analysis has identified several positive trends and factors that are expected to fuel the future growth of the sector, and enhance the emirate’s attractiveness as one of the world’s most sought-after shopping destinations.”

Key drivers of e-commerce activity in Dubai include strong government support in line with its commitment to transform Dubai into the world’s smartest city, and a high mobile penetration rate, along with Dubai’s expanding logistics networks. Furthermore, despite the implementation of value-added tax (VAT), many hypermarkets have managed to keep their prices competitive which have helped offset such costs. Meanwhile, smaller retailers, such as convenience stores, have continued attracting consumers by enhancing their customer service with extended opening hours and delivery services.

Importance of an Audit in Retail Sector

The benefits of conducting retail audits are two-fold. On the one hand, they serve as a tool for suppliers to ensure that retailers are complying with pre-established agreements on product placement, pricing, and promotion. On the other hand, they allow brands to accurately measure their success in the retail environment.

Equally advantageous is the priceless commodity of data that audits provide, though your data is only as good as your method of collecting it. By taking the steps to aggregate quality data from various retail locations over time and comparing results, managers can make actionable decisions that reduce inefficiencies and ultimately drive sales.

Types of Retail Audits

With so much variance in the information that can be recorded in a retail audit, it makes sense to segment audits by data type. Different audit forms should be used to reflect the respective data being collected at a given store visit. Examples of the types of retail audits that a supplier might employ are listed below.

Retail Market Questionnaire

In some cases, brands might simply want to know the lay of the land where their products are being stocked (or could potentially be stocked in the future). Reps might document the following:

  • Consumer sentiment towards the brand and its competitors as discovered by surveying passerby and observing how they interact with the brand.
  • Store appearance and location. Is the store well-organized and clean? Is it located in a suburban or urban area? How does the facade of the store appear?
  • Qualitative and quantitative information about other brands present in the store. How many facings do competing brands have on the shelf? Are there mostly emerging or established brands in your category? 

Merchandising Report

This type of store audit is primarily concerned with the brand’s performance. Reps use merchandising reports to log:

  • Inventory levels
  • Stockouts
  • Condition of products
  • Amount of available shelf space
  • Units ordered
  • Retail price
  • General shelf appearance 

This information can be compiled into a finished product that resembles the merchandising report.