44 IMAGESRetail ME imagesretailme.com JANUARY 2012 MENA retail industry sentiment survey – 2011 “Top 3” challenges – Retailers Other challenges Top 3 challenges s r e l i a t e R 2007 2009 2011 1. Rents and overheads continue to grow 2. Non-negotiable lease terms 3. Very low vacancy rates / no space in malls 1. Declining footfalls 2. Overheads continue to increase 3. Non negotiable lease terms 1. Uncertainties in the market and low consumer confidence 2. Move towards a more consumer centric operating model 3. Driving footfalls • Creating sustainable and relevant developments • Fast changing consumer shopping trends • Absence of or little focus on community concepts • Operating costs • Footfall • Importance of community engagement • Too many look alike centres within a trade area • ‘Slower’ or ‘no-growth’ in population • Not enough budgets for marketing • Staff availability • Find good locations for expansion • Fast changing consumer expectations • Renewal of lease agreement with reduced rents or no increase • Slower’ or ‘no-growth’ in population • Store location availability TRENDS
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44 IMAGESRetailME imagesretailme.com jAnuAry 2012
MENA retail industrysentiment survey – 2011
“Top 3” challenges – Retailers
Other challenges
Top 3 challenges
sreliateR
2007 2009 2011
1. Rents and overheads continue to grow
2. Non-negotiable lease terms
3. Very low vacancy rates / no
space in malls
1. Declining footfalls
2. Overheads continue to increase
3. Non negotiable lease terms
1. Uncertainties in the market and low consumer confidence
2. Move towards a more consumer
centric operating model
3. Driving footfalls
• Creating sustainable and relevant developments
• Fast changing consumer
shopping trends
• Absence of or little focus on
community concepts
• Operating costs
• Footfall
• Importance of community engagement
• Too many look alike centres
within a trade area
• ‘Slower’ or ‘no-growth’ in
population
• Not enough budgets for
marketing
• Staff availability
• Find good locations for expansion
• Fast changing consumer
expectations
• Renewal of lease agreement with
reduced rents or no increase
• Slower’ or ‘no-growth’ in
population
• Store location availability
TrEndS
TrEndS
imagesretailme.com 45IMAGESRetailMEjAnuAry 2012
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.com • The purpose of this survey was to provide
a gauge on the sentiments surrounding the retail industry across Middle East and North Africa over the last couple of years.
• To accomplish this objective, in October-November 2011 a sample of MECSC members and non-members were contacted through a structured open-ended questionnaire.
Members: 480 Non-members: 1862
• The resulting sample comprised of about 52 responses from retailers and 110 responses from mall owners/operators/developers.
• The findings have been identified and presented as top 3 challenges and attributes in 2007, 2009 and 2011.
• The survey was a joint effort of Glasgow Consulting Group (GCG), an independent market research and advisory company, and Middle East Council of Shopping Centres (MECSC)
“Top 3” challenges – Mall Owners / Operators / Developers
Other challenges
Top 3 challenges
2007 2009 2011
Mall Owners / Operators / Developers
1. Creating sustainable and relevant developments
2. Fast changing consumer
shopping trends
3. Overheads continue to increase
1. Increase footfalls
2. Retailers’ tough financial situation
3. Leasing rental rates considered
high in the market
1. Increased competition / many retail real estate developments in the pipeline
2. Retaining tenants
3. Overheads continue to increase
• Architects not designing innovative shopping centres
• Developers not providing proper
parking for retail planned
• Securing line space shop leases
• Less importance to marketing
and promotions budgets
• Higher vacancy rates
• Increased competition
• Retailers’ financial situation
• Re-negotiating financing terms
with banks
• Not enough budgets for
marketing and promotions
• Finding and recruiting talented staff
• Lack of long term financing for
developers
• Landlord’s understanding of the
current market conditions
• Local municipal policies
• Saying we are still in ‘recession’
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