Recovery gathers pace as Gulf retail’s growth story resumes
Steve Vickerstaff, chief operating officer of Alshaya Group, believes that a region so often tested by periods of uncertainty always manages to bounce back, courtesy of well-crafted strategies
Retailers operating across the Gulf have become accustomed to periods of disruption.
The past few years have brought challenges, from the Covid-19 pandemic to renewed geopolitical tensions. Yet appetite for retail investment has held firm.
That pattern is playing out again. Earlier this year, as uncertainty grew across the Gulf, international brands continued to expand in the UAE. Primark and Ulta Beauty opened new stores in Dubai, while Alshaya introduced a new Princi restaurant in Dubai and a Chipotle in Abu Dhabi. That timing, in hindsight, looks prescient rather than premature.
Confidence through uncertainty
For Steve Vickerstaff, chief operating officer at Alshaya Group, continuing with the group’s expansion plans reflected longer-term confidence in the region rather than a read of short-term conditions.
“Over recent years, the markets that we operate in and people in the region more broadly have been faced with periods of disruption and change, and crisis,” he says.
“The region always bounces back, and we share the same confidence as many of my peers in business and government that we will come back stronger, together and united in our vision for the region.”
That confidence is supported by market growth. GCC retail sales are expected to reach $300bn by 2028, up 37% on 2022 levels, according to Strategy& Middle East.
Building supply chain resilience
Sustaining that expansion required Alshaya to manage another challenge: ensuring products arrived when and where they were needed. Delays can affect tightly planned store openings.
“Periods of disruption underscore the strategic importance of treasuries in supporting business growth,” says Imaad Khan, vice president & senior cash management sales manager for Global Transaction Banking at Mashreq.
“By providing working capital and flexible liquidity solutions, we enabled clients to preserve cash flow, maintain supply chain continuity, and pursue expansion opportunities despite market uncertainty.”
Alshaya’s response was to build flexibility into its regional logistics network, with much of its stock delivered to its Dubai hub before distribution across markets. It also used different transport modes and planned inventory well ahead of seasonal demand.
“With much of our brands’ stock coming from Southeast Asia, we have worked with the authorities to keep stock flowing into our markets as planned, whether it’s via alternative ports or airfreight,” says Vickerstaff.
“We already had stock in the market to open all three Dubai stores – Dubai Mall, City Centre Mirdif and the forthcoming Mall of the Emirates store – as well as ensuring supplies for the opening weeks and months are in place.”
Alshaya rerouted sea containers through alternative ports and increased airfreight for some brands, including Primark, while relationships with logistics providers gave it room to adjust.
Strong signs of recovery
By the first quarter of 2026, UAE retail spending and FMCG demand had shown resilience even as regional tensions weighed on sentiment.
According to NielsenIQ’s State of the Nation report, the combined consumer basket across the UAE and Saudi Arabia reached $56.2bn, with UAE FMCG growth of 7.3%.
UAE FMCG sales through traditional trade channels rose 10.9%, while e-commerce accounted for 13% of the category. Essential retail recovered faster than luxury and tourism-linked spending as households stabilised.
The UAE’s e-commerce market expanded through the first half of 2026, even as online retail across the wider Gulf contracted, with gross merchandise value rising 2% year-on-year. The data indicates that consumers are maintaining essential spending amid regional tensions.
A more diverse retail market
Consumer behaviour is shifting alongside the recovery. The Gulf’s luxury reputation remains intact: Bain & Company named the Middle East the best-performing luxury market globally in 2025, with growth of 4%-6%.
Hypermarkets and grocery aggregators also demonstrated resilience, supported by essential food demand and continued investment in omnichannel retail.
Broader sector performance remained robust, with Kuwait retail revenues up 18.4% and Saudi Arabia retail revenues up 56.9%. Disruption reinforced the importance of scale, sourcing agility and local supply resilience. Value and affordability are also shaping behaviour: SAP Emarsys, in partnership with Deloitte, found that 67% of UAE consumers have shifted towards own-label alternatives.
That combination gives retailers room for a wider range of concepts. Alshaya has built a mixed portfolio, using consumer research and its assessment of international brands to identify gaps.
“We ensure that we undertake research with consumers, as well as visit brands across the globe, to ensure we bring the right ones to market in the region as part of our mixed portfolio,” says Vickerstaff.
The same logic applies to existing stores. Alshaya upgraded its H&M and COS stores last year, and Vickerstaff says the refreshed outlets now rank among the strongest in the brands’ global networks. Seven in 10 UAE retailers now integrate digital tools into physical stores, according to Zoho Corp’s UAE Retailer Survey.
Alshaya’s next phase will test whether that combination of recovery, portfolio strategy and supply chain planning can hold at greater scale. The group plans to open its first Chipotle and Ulta Beauty stores in Saudi Arabia this year, alongside Primark stores in Bahrain and Qatar. Its largest commitment is at The Avenues – Riyadh, where all its brands are expected to be represented when the mall opens in 2027, including a four-storey flagship Starbucks.
Alshaya has also sought to strengthen customer engagement through targeted loyalty initiatives. In June, the group launched Aura Pass in the UAE, allowing customers to pay a one-time AED 199 fee for 30% savings across more than 30 participating brands through the end of 2026. The initiative gives Alshaya another mechanism to encourage repeat spending while offering customers greater value.
Taken together, the scale of those plans suggests that the disruption this year has done less to slow the region’s retail growth than to reshape how retailers pursue it. For Alshaya, recovery is an opportunity to move first rather than wait.
