- UAE grocery retail market poised for significant growth, expected to surpass $40.5 billion in 2024.
- Baqalas, traditional small grocery stores, account for 81% of the nation’s grocery retail market.
- Spinneys IPO on DFM highlights the increasing focus on the larger end of the grocery retail market.
The United Arab Emirates’ grocery retail market is on an upward trajectory, projected to exceed $40.5 billion in 2024, according to a report by retail technology firm 24SEVEN. This growth is fueled by a diverse retail landscape that combines modern supermarkets and traditional baqalas, catering to the evolving preferences of consumers across the country.
While the recent Initial Public Offering (IPO) of UAE-based supermarket chain Spinneys on the Dubai Financial Market (DFM) has brought the spotlight onto the larger end of the market, the report reveals that 81% of grocery retailers in the UAE are still “baqalas” – small grocery stores with an area of 50 square meters or less.
The research conducted by 24SEVEN over three months highlights the unique dynamics of the UAE grocery retail market. Despite the prevalence of baqalas, a significant 60% of residents surveyed across the country still visit these small grocery stores or baqalas on a weekly basis. This preference is driven by various factors, including convenience of location close to home or work (59%), access to specific products or items (31%), extended opening hours (27%), friendly staff (20%), and a preference for shopping locally (20%).
While baqalas dominate the market in terms of numbers, the report also sheds light on the technological gap between these traditional stores and larger supermarkets. Less than 1% of baqalas have advanced financial technology in their stores, and 70% do not have a connected point-of-sale (POS) checkout system, according to the research findings.
As the UAE’s grocery retail market continues to evolve, striking a balance between the convenience and accessibility of baqalas and the modern shopping experience offered by larger supermarkets will be crucial. The growth potential of this sector has attracted significant attention, as evidenced by the Spinneys IPO, which is expected to fuel further innovation and competition in the industry.
Retailers and industry stakeholders alike will need to adapt to the changing consumer preferences and leverage technology to enhance the shopping experience across all segments of the market. By embracing this dual approach, the UAE’s grocery retail market is poised to cater to the diverse needs of its residents while driving sustainable growth and economic development.
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Last Updated on May 3, 2024 by Safiya K
