Tuesday 19 June 2018

UAE retail sector faces skills gap challenge

Dubai, June 15, 2014

The UAE’s retail sector, the most mature of the markets in the GCC, is facing a major skillset gap challenge, especially amongst senior level employees, said a study.

The Dubai International Academic City (DIAC)-commissioned study was conducted by Deloitte covering more than 2,400 students across 17 markets in the Middle East, Africa and Asia, alongside a cross-section of companies.

The findings of the 'Workforce Planning Study' revealed that 24 per cent of companies felt lean operations and mall management skills were the skills most lacking amongst senior level employees, while 44 per cent of companies found employees lacking in customer psychology and buying behaviour.

Among the mid-level professionals, the companies felt they lacked the most crucial skill of category management, while for entry-level employees, the customer service skills are underrepresented, it added.
The compounded annual growth rate (CAGR) of retail sector employees in the UAE is 2.61 per cent, a rate expected to exponentially increase in light of Dubai’s successful bid to host Expo 2020.

Dr Ayoub Kazim, the managing director of DIAC and Dubai Knowledge Village said:"The study is a useful tool in enabling us to better support Dubai’s industry growth. With our survey findings we are able to directly inform the market about skills gaps and trends in the growing retail industry so it can confidently prepare for the future."

"More generally, we see an important role for us in bridging the gap between employers and academia. Our mission is to close the skills gap that would otherwise threaten Dubai’s continued growth, noted Dr Kazim.

"Many of our universities offer various degrees in fields related to the retail sector, including Heriot-Watt University, offering a BA in Fashion Marketing and Retailing; Institute of Management Technology, offering a BSBA in Retail Management; and Amity University, who offer an MBA in Retail Management. Supporting the sector-specific education is a step towards addressing the skillset shortage issue," he noted.

The projected growth of manpower demand within the UAE’s retail sector results from exponential growth across the industry as a whole.

The UAE is the most mature retail market in the GCC, with a retail trade size of $38.1 billion (2010); significantly larger than Saudi Arabia at $23.7 billion, Qatar at $8.9 billion, and Oman at $5 billion.

The UAE’s retail sector is estimated to increase by 32.9 per cent by 2015 from Dh114 billion in 2012 to Dh151 billion, according to Dubai FDI’s latest report.

Influencing factors include: high disposable incomes; retail real estate expansion and the continued construction of shopping malls and hypermarkets; a steady inflow of international retailers; population growth; and the rising importance of fashion amongst the consumer segment which has led to a steady growth for luxury retail.

Sales growth for the GCC luxury goods market is expected to outperform global counterparts with a CAGR of over 8.5 per cent from 2010 to 2015, which has contributed to driving overall retail sector growth.

Out of 323 major international fashion retailers, over 50 per cent had a presence in in Dubai in 2013. Today, Dubai is considered by CBRE to be second only to London for global retail.

The retail sector growth has been highly supported by strong performance at the Dubai Duty Free (DDF), the world’s largest single-airport retailer.

According to the DDF, their sales went up by 11.4 per cent year-on-year in 2013 to Dh6.65 billion. Furthermore, the airport retailer has recently expanded with a 2,500 sq m retail space at the new Al Maktoum International Airport, which when fully operational will be the world’s biggest airport.

"Dubai is rapidly transforming into a smart city and leading retail destination. We have witnessed the entrance of global retailers and, more generally, foreign direct investments worth $14.4 billion in 2014, led by several factors including Dubai’s central location, economic competitiveness and ease of doing business," remarked Dr Kazim.
"The retail sector has been supported by Dubai’s marketing and promotional initiatives, such as the Dubai Shopping Festival, a period which, for some retailers, realises up to 30 per cent of annual revenue," he added.-TradeArabia News Service

Tags: UAE | Dubai | Skills | Retail sector | Deloitte |

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