UAE Grocery Retail Market to Exceed $40.5 Billion After Spinneys IPO

UAE’s Grocery Retail Market Set to Surpass $40.5 Billion by 2024 Amid Spinneys IPO

UAE’s grocery retail market holds a pivotal position in the nation’s economic landscape, serving as a fundamental aspect of daily life for residents and visitors alike. A recent report has unveiled a promising projection for this vital sector, indicating that it is poised to surpass a substantial milestone, exceeding $40.5 billion by the year 2024. This surge in market value comes amid heightened attention on the sector, spurred in part by the eagerly anticipated initial public offering (IPO) of Spinneys, a leading UAE-based supermarket chain.

Conducted over a meticulous three-month period, the comprehensive study, led by retail technology firm 24SEVEN, delves deep into the intricate dynamics of the UAE’s grocery landscape. Despite the significant focus on larger market players in anticipation of the Spinneys IPO, a remarkable statistic emerges: a staggering 81% of grocery retailers in the country are small-scale enterprises known as “baqalas.” These humble establishments, typically occupying spaces of 50 square meters or less, wield a significant influence over the daily shopping habits of UAE residents.

Intriguingly, the research findings reveal a striking evolution in market dynamics, with the projected value of the grocery retail market expected to more than double from $19 billion in 2019 to over $40.5 billion in 2024, as per a previous report by WAMDA. Such exponential growth underscores the resilience and adaptability of the sector amidst evolving consumer preferences and market dynamics.

Digging deeper into consumer behavior patterns, the study unveils fascinating insights into the enduring popularity of small grocery stores or baqalas. Despite the proliferation of larger supermarket chains and the burgeoning popularity of online grocery platforms, a significant majority of UAE residents—60%, to be precise—continue to patronize these traditional outlets on a weekly basis. Their loyalty is attributed to a multitude of factors, including the convenience of proximity to home or work, access to specific products, extended operating hours, amiable staff, and a strong inclination towards supporting local businesses—a sentiment that resonates deeply within the community.

However, amid the enduring appeal of small grocery stores, the research also highlights a concerning technological gap prevalent within this segment. Astonishingly, less than 1% of these establishments have embraced advanced financial technology, while a staggering 70% lack a connected point-of-sale (POS) checkout system. This revelation underscores the untapped potential for digital transformation within the sector, signaling an urgent need for modernization to enhance operational efficiency and meet evolving consumer expectations.

As the UAE’s grocery retail market continues to evolve and expand, stakeholders across the industry are faced with a pivotal moment of opportunity and challenge. Embracing digital innovation, enhancing operational capabilities, and fostering consumer-centric strategies will be imperative for small grocery retailers to thrive in an increasingly dynamic and competitive market landscape. With the right strategic approach and a commitment to innovation, the UAE’s grocery sector is poised to navigate the winds of change and emerge stronger and more resilient than ever before.