Department stores lead as DSF spending reaches new highs

Department stores lead as DSF spending reaches new highs

Dubai Retailers may have felt the squeeze during the recent financial turbulence, but certainly not during the latest edition of the Dubai Shopping Festival. Spending at UAE department stores alone rose to its highest, compared to the merchants during the month-long event, giving retailers the feel that the sector is slowly regaining momentum.

According to figures released by the card company Visa, local department stores emerged as the leader, generating $13.7 million (Dh50.27 million) in sales, which is up a substantial 57 per cent from the $8.7 million the year before.

Visa’s figures were based on card transactions conducted on internationally-issued cards in the UAE between January 20 to February 20.

Other top categories included supermarkets, which recorded $7.8 million, restaurants ($7.6 million); electronic stores ($6.7 million); airlines ($5.7 million) and auto rental firms ($4.5 million).

Hasit Kakkad, retail manager at Business Trading Company, said shoppers are more drawn to the convenience of one-stop shopping which is otherwise not available in standalone stores. BTC is a distributor of Matalan, a UK value department store brand.

“In our case, it’s definitely the price issue, but I think the department store concept appeals more to shoppers,” Kakkad said.

“What we do at Matalan, for instance, is create a nice shopping experience with a good assortment of products, from homeware to clothes and accessories, so consumers are actually not shopping for just one item, they’re buying different items.

Additional purchases

“In other sectors, say if you were just a shoe shop or an electronics outlet, the chance of doing additional purchases is lower.”

In terms of who were spending more during the Festival, Visa said visitors from the UK topped the table by splashing out $44 million, up 5 per cent on last year. Chinese shoppers came in second with $41 million, but that still represented a huge 109 per cent increase on the previous year.

Visitors from Saudi Arabia racked up $39 million on their cards, up 83 per cent over DSF 2010, while shoppers from the US spent over $29 million, a 10 per cent increase. Overall, tourists racked up $406.4 million on their cards during DSF this year, up 37 per cent from $297 million in 2010. Outside the retail sector, the biggest gains were notched up by hotels and serviced apartments, which generated over $90 million in card transactions.

The negative economic climate had taken its toll on retailing in the UAE forcing some to close shop. “Consumers have changed their purchasing habits, resident expatriates have returned to their home countries and the number of tourist arrivals to the UAE has decreased,” noted Euromonitor International in a report last year. However, there are strong signs that the retail sector is making a comeback. “Compared to last year, sales have continued to grow positively,” Kakkad said.

Dining time: Swiping spree

More UAE consumers are ditching home-cooked meals in favour of restaurants and fast-food places.

According to Emirates NBD, which recently reviewed credit card transactions in the UAE, diners are swiping their plastic more often.

Food spending at restaurants, hotels and other outlets grew by 50 per cent in 2010 from a year earlier. Eating out accounted for around 5 per cent of credit card spend.

Spending was high among the bank’s premium customers, particularly UAE nationals, Western and Arab expatriates.

“From local flavours to international delicacies, from fine dining at some of the most premium restaurants to casual dining, there is something for everybody to feast on,” said R. Sivaram, senior vice-president and head of cards at Emirates NBD.

Experts said consumers have indeed tightened their purse strings when it comes to non-essential items, but the tempting discounts on offer at restaurants coupled with a wide range of dining selections are just too hard to resist.

In fact, results from the Nielsen Company’s Global Consumer Confidence Index 2010 showed that once the essential living expenses are taken care of, around 20 per cent of consumers said they would spend the remaining amount on “out-of-home entertainment”.