BMI View: Kuwait is a small market for retailers due to its small population size. However, high levels of urbanisation, disposable income and household spending mean there are opportunities, particularly in the higher-end segment. Modern retail formats are increasingly popular, as the comfort of malls offers protection from extreme weather conditions. Foreign brands are also on the rise, driven by the high number of foreign workers in the country.
After a tough year due to the turbulence in the petroleum markets which led to lower oil prices - with oil the overwhelmingly dominant industry of the Kuwaiti economy - we expect the country to post 2.5% and 1.9% real GDP growth in 2015 and 2016, respectively. Kuwait's dependence on oil and oil-related activities as a driver for economic growth does make it vulnerable and the slowdown of the last two years is evidence of that. Despite these frailties and the volatility in the oil industry, the Kuwaiti economy is expected to continue posting healthy, though not spectacular, growth figures during our forecast period - averaging 2.2% over the next five years. Overall the country has a solid financial foundation, after accumulating many budget surpluses over the years, meaning government debt is low, while they continue to invest abroad with their sizeable sovereign wealth fund.
The country has a very small population with only 3.4mn people inhabiting Kuwait. We note, however, high average income and spending levels: at USD30,455 per household and USD50,404 per household, respectively. The discrepancy is due to the high number of foreign workers and tourists in the country. The high average spending is a positive characteristic for retailers as that means very few households are limited to just purchasing the most basic goods, giving retailers opportunities to diversify further. Another key characteristic is the number of households in the highest income bracket of USD50,000+ which is expected to reach 15.8% of the...
The Kuwait Retail Report has been researched at source and features BMI Research's independent assessment and forecasts for the retail sector. The report examines key drivers of retail sales growth and future prospects, including consumer spending and private sector investment.
BMI's Kuwait Retail Report also examines the level of development and potential for growth of the retail sector, the commercial initiatives of major players, changing consumer demographics that influence demand and the regulatory environment. Key sub-sectors include mass grocery retail, autos, over-the-counter pharmaceuticals, computers and consumer electronics.
- Benchmark BMI's independent retail industry forecasts for Kuwait to test other views - a key input for successful budgeting and strategic business planning in the Kuwaiti retail market.
- Target business opportunities and risks in Kuwait through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
BMI Industry View
Summary of BMI’s key forecasts and industry analysis, plus a discussion of major industry developments and a snapshot of key short-term demand-driving macroeconomic movements.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the retail sector and within the broader political, economic and business environment.
BMI Industry Forecasts
There are four separate 5-year forecast modules in the retail reports. These are:
- Headline Retail Forecast: Total household spending (local currency and USDbn, % growth, % GDP, per capita, per household), spending by retail sector (food & non-alcoholic drink, alcoholic drink, clothing & footwear, housing & utilities, furnishings & home, health, transport, recreation, education, restaurants & hotels, personal care & insurance (local currency and USDbn, % growth, % GDP, % of total spending)
- Retail Sector Forecast: Breakdown of Food, Non Alcoholic Drink, Alcohol, Tobacco, Clothing, Footwear, Household Goods, Furnishings, Appliances, Glass and Tablewear, Household Textiles, Consumer Electronics, Garden Toys and Pets, Home and Garden tools, Personal Care, Personal Effects Spending (USDbn, % Growth)
- Household Income and Numbers Forecast: Number of Households (‘000, % growth); gross income per household and per capita; net income per household and per capita; tax and social contributions per capita; breakdown of household incomes – USD5000+, USD10,000+ USD50000+ (‘000, % of total); labour force, employment and unemployment (‘000, % change)
- Demographic Forecast: Total population; Babies 0-12 months; Young Children 0-4yrs; Children 5-9yrs; Young Teens and Older Children 10-14yrs; Older Teens 15-19yrs; Adults 21yrs +; Young Adults 21-29yrs; Middle Aged 40-64yrs (‘000, % growth, male, female); Urban Population (‘000, % population); Rural Population (‘000, % population).
BMI’s Retail Risk Reward Index
BMI’s Risk Reward Indices provide investors looking for opportunities in the region with a clear country comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
Provides a detailed country-specific analysis of the key trends and developments in the retail sector as a whole, as well as an assessment of the main drivers affecting the major retail segments including mass grocery retail, fashion, pharmacies, consumer electronics, home improvement and personal care. The market overview also considers the most effective store formats in a given country and the impact of these factors on the main international and domestic players’ development strategies.
This provides a brief overview of the key players in each subsection of the retail sector including MGR, Fashion, Home Improvement, Consumer Electronics, Pharmacies, and Department Store chains.
The Retail Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.