Oman’s wholesale and retail trade at $4.9 billion in 2016

MUSCAT: Oman’s wholesale and retail trade eased to $4.9 billion in 2016, against $5.1 billion in 2012, although the long-term fundamentals still remain strong.

The impact of economic slowdown on the retail sector has been higher compared to its Gulf Cooperation Council (GCC) counterparts. Growth decelerated since 2014 and fell by 18.2 per cent in 2016, according to the GCC Retail Industry Report published by Alpen Capital, an investment banking advisory firm.

Consumer sentiments are weak on account of subsidy cuts, which is the major factor behind the decline in retail sales. “Consumers are becoming cautious and focusing on buying essential items. Their spending power may further come down, as the government plans to introduce selective taxes in 2017,” noted the report.

Standalone retail outlets

Oman’s retail landscape is concentrated in the hands of standalone retail outlets and has only a few regional and international retailers. As consumers look for a wholesome shopping experience combined with entertainment, the retail market in the country is transforming to accommodate large leisure shopping complexes. Supply of retail space has gained steam in the last two years, which saw addition of large shopping centers like Avenues Mall, Oasis Mall and Panorama Mall, among others. The organised malls and standalone retail outlets are largely concentrated in Muscat. Overall, the city has about 345,000 square meters of leased mall space. There are many retail projects underway, including Palm Mall Muscat (105,000 square metres at a cost of $234 million), Mall of Oman (137,000 sqm at a cost of $715.2 million) and some community centres. The UAE-based Majid Al Futtaim plans to invest $1.3 billion on retail developments in Oman by 2020.

Increasing population and international tourist arrivals have been the vital driving forces of the retail market in Oman.