Saudi Arabia's retail sector is predicted to grow by 21% with sales rising from c. $76 billion in 2008 to $97 billion by 2013 as per Business Monitor International's fourth quarter retail report on the Kingdom. The growth is fuelled by strong underlying economic growth, rising disposable incomes, and a growing population base of young people.

The report forecasts GDP growth to average 3% over the next couple of years. This growth along with an increase in population from 24.4 million in 2008 to 26.5 million in 2013 will push consumer spending to $5,246 per capita, a growth of over 24% from existing levels. Increased urbanization is also driving retail sales. Data suggests that urbanization has increased from 89% in 2005 to above 90% expected in 2010.

The report suggests that as the population of age group 24-40 increases retail figures will also see a surge. Saudi Arabia's market share of total retail sales in the Middle East and Africa region is close to 20%. This share however, is expected to decrease to 17.2% by 2013 as African economies experience higher than average growth in consumer spending.

The report also provides some comparison with neighbouring GCC markets. Kuwait's retail sales are forecast to grow from $38.7 billion in 2008 to $53.7 billion in 2013, while in Bahrain sales are expected to grow from $2.94 billion in 2008 to $4.05 billion in 2013. UAE still remains the dominant market in the region where sales are predicted to hit $142.5 billion by 2013, a rise of 26% over 2008 figures.

Source: Report on Saudi Retail by Business Monitor International