THE W-SHAPED RECOVERY

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Data analysed by MAF and revealed by CEO Alain Bejjani landed on the conclusion of a W-shaped recovery for the company in 2020, which means that it showed tremendous promise for the Middle East’s retail sector after the initial crash during the lockdown period, dipped back into a sharp decline and then finally entered into a full recovery period.

The figures are examined in five parts: Pre-lockdown, lockdown, postlockdown and recovery months, postsummer, and end-of-year.

The pre-lock down months of January and February saw sales and growth similar to the same period in 2019 for Majid Al Futtaim malls.

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The UAE government announced the nation-wide lockdown on March 25, 2020. The malls began partially reopening beginning April 25, 2020, but shoppers remained cautious. During this time, Majid Al Futtaim witnessed a 60% decline across all categories, except hypermarkets and supermarkets (Carrefour), which saw a 35% year-on-year increase due to stay-at-home regulations.

E-groceries and other “essential items” witnessed a massive surge in demand worldwide during these months, which resulted in many outlets being overwhelmed and having to hire and reskill their employees. MAF had to reskill and redeploy over 1000 employees throughout the MENA region. MAF’s leisure, entertainment and cinema employees were reskilled to join the Carrefour business on a temporary basis to assist with online order fulfilment, food packing, stock r1e8p| RlEeTnAIiLsMhEm| JAeNnUtAaRYn2d02o1 ther tasks.

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Post lockdown, between May and July, there was a gradual recovery with shopper sentiments changing slightly for the benefit of retailers. With the exception of leisure and entertainment, a lot of other categories that MAF deals in started seeing a V-shaped recovery. Come August, the company reached its recovery peak with a 2% year-on-year retail increase compared to August 2019 excluding tourism. This included a 6% growth in fashion and 17% in hotels.

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End of year sealed the deal for the W-shaped recovery of retail across categories to 2019 levels. With the economy opening up to events, announcement of Dubai and Abu Dhabi shopping festivals, mega sales such as Black Friday and White Wednesday, and the holiday season kicking off, shoppers started being more liberal with their expenditure . Overall, the 2020 performance for the UAE’s retail economy can be forecasted at approximately 10% lower than 2019, but this is still a huge improvement from where it was mid year. This is not a precise indication of the recovery of the retail sector but with all the efforts being taken by the industry and its various stake holders including the government, federal authorities, landlords, technology solutions providers and the wider business community, sustaining this progress might actually be possible.

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However, post-summer there was a steep decline in most categories including supermarkets, which although less steep, continued through October. The trend in retail was somewhat proportional to the increase in Covid-19 cases as this was the period when the second wave was predicted and the number of infections reported within the country gradually started increasing again after seeing a steady drop in the previous months. ■