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Despite VAT, Retail Sector continues to grow

VAT has spurred UAE retailers to refocus on how they deliver customer value

The introduction of the value added tax (VAT) has led the majority of retailers across the UAE to focus on ways in which they can provide greater value to shoppers, who have become more discerning in their purchases.

Retail experts have noted that shoppers in the country have become well acquainted with the consumption tax, and that sales have once again picked up after the slight slump in the beginning of the year. Officials have also expressed their confidence in the continued strength of the UAE’s retail sector and it’s on track to grow as per growth forecasts by leading institutions. The country’s retail sector is projected to expand at a compound annual growth rate of 4.9 per cent, according to an analysis released by the Dubai Chamber of Commerce and Industry.

Euromonitor International noted that the value of UAE’s retail sector stood at $56.6 billion at the end of 2016, and that the UAE’s retail sales turnover is expected to exceed $71 billion by 2021. Recent data from LinkedIn showed that the UAE’s fastest growing industries over the past 15 years have been the retail and hospitality sectors. Dubai’s retail market, in particular, is projected to grow 5.6 per cent during 2018 to 2021, with retail sales reaching Dh160.7 billion by 2021, a study by the Dubai Chamber found. The size of the Dubai retail market grew to Dh128.45 billion in 2017, accounting for around 67 per cent share of the UAE’s total retail market size. Dubai accounted for around 49 per cent of all shopping malls in the UAE, followed by Abu Dhabi with 36 per cent.

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Source: Khaleej Times