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GROCERY Business Setup

The UAE enjoys a modern, diverse and growing retail food sector. The emergence of hypermarkets in recent years has led to a number of new players in the large store market. An estimated 90 percent of food is imported and prices are relatively high given transportation costs and exchange rate fluctuations.

Retail development is more focused in Abu Dhabi, Dubai and Sharjah, the three largest emirates of the UAE which account for nearly 75 percent of the population, major retailers are including smaller emirates in their expansion plans. Consumers in the three large emirates tend to shop more at larger stores and less at smaller grocery and convenience stores; such stores are relied upon for last minute food needs. However, in the more distant suburbs and the less-populated areas of the country, grocery and convenience stores play an important role in the retail business. Hypermarkets, superstores and supermarkets, despite their limited number, are gradually gaining larger market share, accounting for about 50 percent of all retail sales. Smaller-sized groceries and convenience stores account for the balance.

Why grocery business thrives well in UAE?

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Why grocery business thrives well in UAE?

  • The U.A.E. enjoys one of the highest per capita incomes in the world.
  • The retail sector continues to grow and modernize as reflected by the resources devoted to upgrading existing stores and construction of new outlets.
  • The U.S. enjoys a fixed exchange rate with the UAE Dirham.
  • U.S. products are perceived as high quality and importers like to deal with U.S. suppliers.
  • The U.A.E. imports 85 percent of its food requirements.


Grocery demand (Market Overview)

  • Most growth in the retail sector is occurring in large-sized stores. Consumers tend to conduct their primary shopping in larger stores, but some stores are opening smaller stores in newly developed residential areas.
  • Hypermarkets, supermarkets, and superstores are generally located in urban areas. Smaller-sized stores are scattered in urban, suburban, towns and rural areas, with a larger concentration found in the country’s interior.
  • Locally processed food (often with imported ingredients) may represent only 20 percent of all retail products but this sector is slowly growing. New-to-market products are welcome, but promotion is vital.

Drawn by the country’s affluence, food suppliers from all over the world vigorously compete for market share. EU and Asian products pose the greatest competition to U.S. products. Both hold a proximity advantage, which translates to lower freight costs. Locally processed food products are limited in range and are most competitive in the categories of snack food, juices, poultry, bottled water, dairy products and some confectionery items.

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