Business & Money | Tuesday 2 June, 2015 12:29 pm |

A report released today by A.T. Kearney has ranked Saudi Arabia as the 17th most-attractive country for retail development in the Global Retail Development Index (GRDI). Despite the lowered oil prices, retail sales growth is expected to continue. Saudi Arabia generated the region’s largest total retail sales in 2014 surpassing $102 billion, and yet it remains largely untapped with great potential for growing retail development.

The Kingdom’s retail space grew 5.6 percent to 2.1 million square meters in 2014, while sales increased 6.4 percent. The unique makeup of Saudi Arabia’s retail sector means that traditional markets (bakalas) still own large portions of the market, offering opportunities for modern retail to grow. Additionally, developments in the regulatory framework have come to benefit retailers. One example is Saudi Arabia implementing a framework to open its market for foreign investment, which could have profound effects on FDI into the retail sector.

Shamail Siddqi, Principal of the Consumer and Retail Practice, A.T. Kearney Middle East, stated: “Saudi Arabia is a very exciting place for retailers. The sheer size of the market, combined with an ever-evolving regulatory framework, means that forward-looking retailers consider how to best capitalize on this relatively untapped marketplace. Going forward, we expect to see a wide variety of new entrants and expansions of hyper-markets, luxury, food and beverage, and furniture outlets.”

The 2015 GRDI includes a special feature on the prospects for luxury goods in developing retail markets. Martin Fabel, Partner and Global Head of the Strategy Practice, A.T. Kearney Middle East, commented: “Our work with consumer industries and retail clients show that retail sales growth is expected to continue Luxury remains a relatively bright spot in emerging markets, as the wealthy have proven less vulnerable to economic woes than the general population.”

The feature includes an analysis of the 15 leading luxury brands and their presence in the GRDI’s top 30 countries. The analysis shows that developing retail markets fall into three tiers of luxury development, with different implications for brands looking to enter or expand in these markets. Saudi Arabia currently hosts 14 of the top 15 brands, indicating a strong local demand for luxury brands and an opportunity for luxury retailers to further penetrate the market.


Published since 2001, the GRDI ranks the top 30 developing countries for retail investment worldwide (see chart below). The Index analyzes 25 macroeconomic and retail-specific variables to help retailers devise successful global strategies to identify emerging market investment opportunities.