(MENAFN- Muscat Daily) Oman has been ranked as the 17th most attractive destination for retail investment among 30 developing markets in view of its robust economy, growing population and increasing consumer confidence - all of which contribute to make the sultanate a popular growth location for regional and global retail players.
The 2014 Global Retail Development Index (GRDI) report - released by global management consulting firm A T Kearney - highlighted that retail sales in Oman have grown by seven per cent per year since 2011 and that the grocery sector leads the growth. ''The concentration of growth is in the capital, Muscat, where half the population lives. Despite its small size, Oman's solid economy, increasing consumer confidence, and recent government moves to improve access to credit make this a popular growth location for regional and global players,'' it said.
The GCC region continues to show strength as a dynamic retail market, with four countries - the UAE (4th), Kuwait (8th), Saudi Arabia (16th) and Oman (17th) - ranked among the top 20 most attractive retail markets. The report said that the Omani grocery market is fairly concentrated by Middle East standards, with the top five players - Khimji's, Safeer, Lulu Hypermarkets, Spinneys and Carrefour - owning half of the market. ''Hypermarkets account for 70 per cent of grocery sales. Supermarkets and neighbourhood stores, while still important, comprise around 30 per cent.''
The report highlighted the recent developments in the Oman market, saying, ''Netherlands-based SPAR International has signed an expansion agreement with Khimji Ramdas for nine supermarkets by 2016. Muscat Grand Mall plans to invest US$129mn to add 100 stores to the existing 150. Majid al Futtaim (MAF) is developing the US$467mn Mall of Oman, which will have 157,000 sq m of space and 350 stores.''
Another key finding in the report is that the regional retailers are becoming important players in emerging markets by using their proximity as a competitive advantage to steal share in neighbouring markets.
The report noted that the Middle East is a dynamic retail region - with a growing and young population, strong GDP growth, and increasing consumer confidence and spending. ''Consumers are becoming more demanding, seeking formats to better meet their needs, along with more interesting, creative concepts. As the market saturates, developers such as UAE's LuLu Hypermarkets and Majid al Futtaim are now expanding across the region. Fewer international companies entered in 2013, but those in the region focused on expanding their footprint and growing local brands.''
The 2014 GRDI report added that online sales are still in their infancy in the region, but Internet and smartphone penetration is high. E-commerce in the Middle East and North Africa (MENA) is predicted to grow from US$9bn in 2012 to US$15bn by 2015.
The GRDI ranks the top 30 developing countries for retail investment, based on several macroeconomic and retail-specific variables. The study identifies the markets that are the most successful today, and those that offer the most potent
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