UAE Mall Owners And Retailers Recommendactions For A More Sustainable And Resilient Retail Sector In The UAE

A new report from a high-level retail industry think tank has recommended 25 actions to help the UAE’s retail and mall industry survive the impact of the Covid-19 pandemic.

Launched today by the UAE Retail and Malls Think Tank, “Resilience in Retail and Malls” –https://bit.ly/35CCsdB – highlights challenges facing the UAE retail sector and makes 25 recommendations for a more sustainable sector including action to increase collaboration between retailers and mall owners, accelerating the digitalization of the retail sector, and legislation to help safeguard businesses and workers from future disruptions.

The UAE Retail and Malls Think Tank is a focus group comprising leading industry players from across the UAE retail and malls sector brought together by Mashreq Bank and MEED. Its purpose is to assess the challenges in the UAE retail industry highlighted by Covid-19 and to recommend actions to overcome them.

The report recommends 25 actions to support the UAE’s retailers and mall owners and operators to create a more resilient sector this is better able to withstand future shocks.

Analysis from the report shows that, prior to the COVID-19 pandemic, retailers were already facing difficulties from the increasing popularity of online shopping and growing oversupply of mall capacity. Lockdown measures to stop the spread of the virus exacerbated the impact of existing burdens, shutting down revenue streams while operating costs continued.

In response, the Think Tank was established to determine actions that the industry can take going forward to emerge stronger from the present crisis. The recommendations identified by the Think Tank address five key questions on collaboration, growth opportunities, innovation, customer and staff welfare, and future shocks.

Joel D Van Dusen, Head of Corporate and Investment Banking Group, at Mashreq Bank, said: “In the UAE’s economic diversification strategy, the retail sector has been one of the drivers supporting the Emirates’ vision to reduce its dependence on oil. While the COVID-19 pandemic has exposed weaknesses in and brought new pains to the sector, there continues to be massive value and potential waiting to be seized by those who rise to the challenge. The report presents insights and recommendations that act as a timely reminder for the industry to come together and rethink the existing model. Only by creating a permanent shift in the way business is done, will the retail sector be able to future-proof its position for the long-term.”

Richard Thompson, MEED’s Editorial Director, stated, “The world-class offering in the retail market has helped to propel the UAE as an attractive destination for shoppers and retailers alike. The report underlines that, unless collaborative action is taken by key industry stakeholders to accelerate positive change, maintaining the UAE’s status may prove difficult given the onslaught of challenges from online shopping and COVID-19, among others. The recommendations provided by the UAE Retail Think Tank lay out a clear path for the retail sector to follow as they forge ahead to build a more resilient ecosystem.”

Among the several opportunities for improvement identified in the report, four themes stand out:

• Firstly, there needs to be increased collaboration between retailers and landlords. By moving away from the current transactional approach – which is largely governed by profits and losses – to a partnership model, the two parties can benefit from a more holistic and mutually supportive relationship founded on strong communication. The report recommends areas for cooperation between retailers and landlords,including joint ventures, consumer journey improvements, marketing and data sharing.
• The second theme that emerged is the need for a common voice to represent the interests of the UAE retail industry to government. The UAE Retail Think Tank is one manifestation and should also be accompanied by others, such as an industry body that regularly meets to discuss issues and an industry forum to support more open communication between retailers, landlords and the public sector.The retail sector should consider developing an effective model that presents a unified perspective to the UAE government.
• Thirdly, it is imperative that the industry digitalizes all aspects of the value chain, incorporating innovation across supply chain management, customer sales and last-mile delivery. The government and industry need to work together on initiatives that utilize technology from the start to the end of the value chain, beginning at the way products and services are manufactured and procured, through to sale and delivery, in order to improve efficiency and minimize costs.The paper further outlines that due to retail infrastructure in the UAE lagging behind China, USA and Europe, the UAE Government should introduce more standards for minimum technology requirements to enable the deployment of smart technology and automation to improve efficiency.
• Fourth, is that more formal legislation is introduced to help safeguard the business as well as employees against future disruptions. For example, a new law should require retailers to put aside a portion of their revenueas cash reserves. Additionally, insurance policies should be re-written to cover lost revenues against epidemics and pandemics. While expensive, in light of many recent major outbreaks such as SARS, MERS and now COVID-19, this could soon become a necessity.

The recommendations emphasize the need for more collaborative relationships between retailers, landlords and government to help the industry build resilience and tide over the current crisis. Over the long-term, cooperation will continue to be a key factor enabling retailers to realize the sizeable opportunities in the sector.

The UAE Retail Think Tank was launched in 2020by Mashreq Bank and MEED. It brings together key industry representatives, including retailers, entertainment providers, shopping malls, consultancy and advisory firms, and financial services companies, to provide strategic recommendations for a more sustainable and competitive retail sector in the UAE.