Dubai’s retail market in 2015 is estimated to have reached $35.4 billion (Dh129.9 billion), witnessing annual growth rates of 3.5 per cent to 7.5 per cent since 2010, according to analysis by the Dubai Chamber of Commerce and Industry.

Based on data from Euromonitor International, the analysis showed that the retail industry is expected to expand by 7.7 per cent in 2016. Annual growth rates are then set to reach 8.1 per cent annually from 2017 till 2020, when sales turnover are projected to surpass $52 billion.

In 2015, store-based retailing was behind 98 per cent of the total value of retail, and its pace of growth has, by large margins, outpaced growth of the non-store retailing category since 2010.

“Growing economic prosperity, steady population growth, and rising incomes have all helped to increase consumers’ overall expenditure in Dubai. In addition, the boom in tourist numbers [has] kept the wholesale and retail sector vibrant,” said Hamad Buamim, president and chief executive officer of the Dubai Chamber.

According to the analysis, the value of non-grocery retail reached $22.3 billion in 2015, with sales growing at an annual rate of 7.1 per cent, driven by stronger demand. Meanwhile, grocery retail reached a value of $10.9 billion, with a growth rate of 6.8 per cent in sales over the 2010-2015 period.

Non-store retailing channels also witnessed rapid growth over the past five years, with an annual growth rate of 21 per cent for the entire category, as internet retailing saw a 23 per cent growth rate. The analysis states that despite being the leading non-store retail channel in terms of growth, internet retailing remains at a very early stage of development.

This is especially true when considering that it only makes up less than two per cent of total retail sales value — a relatively low figure compared to other global markets. The Dubai Chamber analysis estimates that both categories of retail (store and non-store) will witness high levels of consumer spending in the medium term, driven by growth of the expatriate population and rising incomes.

Apparel and footwear retail outlets are set to lead growth in the medium run at a forecast 6.6 per cent annual growth rate, which will keep it as the largest sub-segment under the non-grocery retailing category. The remaining major sub-segments, such as electronics and appliances, health and beauty, home and garden, leisure and personal goods are forecast to witness growth rates in the range of 3-6 per cent over the same period.

Non-store retailing channels are forecast to grow at a 19 per cent annual rate on the medium term, with internet retailing, and in particular mobile internet retailing, leading sales with up to 34 per cent annual growth.