Saturday 24 February 2018
 
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Bahrain City Centre

Bahrain retail market growing at 11pc per year

MANAMA, 18 days ago

Bahrain’s retail sector has been growing steadily over the past decade and remains one of the most dynamic sectors in the Kingdom, with an annual growth rate of 13 per cent, according to a new study by KPMG.

During the 2007-17 period, the increasing population coupled with household income growth, as well as the inflow of tourists from Saudi Arabia, have led to the tripling of retail capacity between 2007 and 2017, said the study titled “Tourism: A Game Changer for the Retail Sector in Bahrain”.

Kenan Nouwailati, head of Management Consulting at KPMG in Bahrain said: “Tourism plays a significant role in the performance of retail in Bahrain. At least 65 per cent of tourists in Bahrain arrive from Saudi Arabia, accounting for the dominant revenue share for retail businesses. Cinemas, food courts and family entertainment centres in Bahrain’s shopping malls are the main attractions for the Saudi visitors coming from the Eastern Province and Riyadh.”

According to the report, the ten largest malls in Bahrain are located in prime areas and account for a total footfall of 51 million visitors per year and enjoy high occupancy levels ranging between 95 per cent and 100 per cent.

However, the average number of retail square meters per resident is less than half in comparison to global cities such as New York and Dubai, and is more comparable with cities like Singapore and Hong Kong. This means the local retail market has still not reached full maturity, which indicates positive signs for growth potential.

“With the increasing investment in infrastructure and malls, especially in the Northern part of the island, we expect the sector to continue to grow at the same rate in the next two to five years,” Nouwailati added.

The report also highlighted how tourists’ pending patterns differ, according to the number of days they spend in the country. On average, tourists arriving via Bahrain International Airport tend to stay, 4 days longer than the tourists arriving through the King Fahad Causeway.

Up until 2017, the latter group accounts for more than 90 per cent of 1-day visitors per year. As a tourist destination, Bahrain has an average length of stay of 2.6 days compared to 4.2 days in benchmark cities, such as Dubai, New York, Paris, Hong Kong, Singapore and London. Hence, there is a huge opportunity to increase revenues for public and private stakeholders in the retail sector, if tourism, including the number of tourists and the length of stays, are improved.

“If Bahrain attracts an additional 1 million tourists and increases the average stay length to 3.6 days, the country could generate BD300 million ($795 million) of additional revenue from tourists’ expenditure on the retail sector only,” Nouwailati concluded.

The report highlights the performance and growth potential of the retail market in the Kingdom of Bahrain and the impact of tourism on the sector. It is intended to bring new perspectives and inform decision making for relevant entities. Looking forward, it reflects on six breakthrough ideas to help grow the retail market through tourism. – TradeArabia News Service




Tags: Bahrain | KPMG | retail market |

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