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FRESH WIND FOR THE UAE’S F&B SECTOR

Fresh wind for the UAE’s F&B sector

June 2016

The demand for healthy options, high quality offerings and innovative dining are propelling the food and beverage sector in the UAE.

 

 

 

The rapidly growing food and beverage (F&B) sector in the UAE, and its ability to compete with the international market, signify a consumer base that is both knowledgeable and demanding.

According to property consultant CBRE there is an increased demand for higher quality F&B offerings in retail malls across the emirates. “Consumers are increasingly looking for healthier options and new, innovative concepts. Although there is strong competition we see home grown F&B outlets arise in malls, together with fine dining options,” says the property consultant.

Earlier this year the UAE’s penchant for retail earned it a place as the third biggest F&B spender globally in shopping malls, after Norway and Switzerland.

The ranking which emerged from CBRE’s latest Food and Beverage report, illustrates the strong F&B offering in the UAE and its position as a global player in the F&B market. According to the report – which surveyed 22,000 consumers across 22 markets – UAE residents spend on average approximately AED 68 per person per mall visit, just AED 6 behind Switzerland.

In 2015, the UAE’s F&B sector was valued at USD 11.7 billion (AED 42.9 billion) according to a KPMG survey and is expected to grow further. It’s not surprising; experts maintain that the strong F&B market in the UAE demonstrates a considerable degree of resilience following the economic downturn.

Proving the country’s retail proclivity, Abu Dhabi and Dubai were also recently ranked amongst the top 17 of the most active cities for shopping centre development, according to CBRE’s latest Global Shopping Centre Development report.

THE EVOLUTION OF F&B

Erik Volkers, Associate Director, CBRE Middle East says that the UAE, and especially Dubai, has seen tremendous growth of organised retail supply over the past decade.

“Dubai is home to 56% of the world’s retail brands, ranking second only after London in terms of global brand coverage, with more and more retailers choosing the emirate as their entry point into the region. Economic growth as well as population and tourism growth have boosted the retail market with growing visitor numbers,” says Volkers.

According to CBRE, the findings reveal that while the location of a shopping mall is key, the retail mix and F&B facilities are also paramount – a crucial insight for developers of new, large-scale shopping malls, who are placing an increased emphasis on creating a compelling, varied and innovative F&B offering as a means to attract retailers and shoppers, and to boost retail spend.

“The positive ripple effect on retail spend is evident, with 57.4% of UAE respondents admitting to ‘almost always’ visiting shops, while the original motivator behind the visit was consuming the F&B on offer at the shopping destination,” says Volkers.

Historically the better quality and licensed F&B options have been situated in luxury hotels spread across the emirates.

“Until quite recently the organised retail stock (malls) predominantly offered fast food outlets within the food courts and restaurant chains. Both in the UAE as well as in international retail markets we see the allocation of F&B space in organised retail stock increase with a different F&B offering than before. There is a trend to diversify the F&B offering including more innovative and healthy/organic concepts, more of top quality restaurants in shopping centres, better food quality and more child friendly dining options,” he says.

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