"Kuwait Retail Report Q1 2014" Published

The Kuwaiti retail sector is set to continue to grow over the next few years, with a favourable long-term economic outlook, a sophisticated consumer base and high levels of disposable income resulting in a strong rise in household spending across all retail subsectors. We are particularly positive about the future growth prospects for communications and personal care; however, we expect the highest proportion of the household budget to be spent on housing & utilities throughout our forecast period, with food & nonalcoholic drinks also taking a substantial share.

The new Kuwait retail report provides an extensive and comprehensive forecast of various retail indicators including household spending and headline total spending across each retail subsector, household income and employment forecasts, demographic forecasts and a detailed breakdown of household and per capita spending across a large number of retail areas including food & drink, clothing & footwear, household goods and a number of other subsectors.

Full Report Details at
- http://www.fastmr.com/prod/759103_kuwait_retail_report_q1_2014.aspx?afid=302

Until recently, Kuwait's retail market was somewhat overshadowed by neighbouring Dubai, with its more sophisticated offerings. However, international retailers are increasingly eyeing up opportunities in the small but wealthy state, with Kuwait at the forefront of the fashion market in the Middle East. The nonfood sector is dominated by shopping malls, which are becoming larger and more impressive, with The Avenues a prime example.

In a country in which 45% of the population is in the 20-39 years age range, important for household spending on the retail sector, malls such as The Avenues are attracting young consumers keen to buy international brands. Kuwaiti women do not generally wear abayas, so there is a much more open attitude towards fashion. Retailers and developers are all too aware of this, with Sheikh Majed al-Sabah's planned 86,000ft2 Exhibition Hall destined to showcase many international fashion brands.

We see long-term potential in the Kuwaiti consumer market, particularly for non-essential items and aspirational purchasing by younger consumers whose incomes are rising. Net per capita income is projected to increase from US$10,137 to US$11,521 throughout our forecast period, with average net household income forecast to rise from US$65,411 in 2013 to US$71,349 by 2018. This increased spending power is good news for retailers of non-essential, luxury items, and we expect a corresponding increase in household spending on clothing & footwear, communications, personal care and restaurants & hotels.

However, we note that Kuwait's economy will grow at a modest pace throughout the coming quarters, and we remain cautious on the country's investment outlook, although we note that robust growth in construction loans in H213 and the prospect of a mild increase in government capital expenditure provide encouraging signs for gross fixed capital formation.

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