In the past week, observers of global retail trends have received the latest statistics from Eurostat, which show that retail sales in the EU fell 0.2% in August for a 1.3% year-on-year decline. A more significant decrease was observed in the eurozone, where the figures stood at 0.4% and 2.0%.
The statistics, which many economists had been anticipating, point to weak consumer demand and underline concerns that the region is falling into a recession.
The most significant yearly decreases in total retail trade volume were registered in Denmark (-6.0%), the Netherlands (-5.8%) and Finland (-4.7%).
Over the channel in the U.K., data from the Office of National Statistics show a similar pattern, with sales volume down 1.6%, in August representing a 5.4% YoY decline.
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Weak spending comes despite a general recovery in footfall on the country’s high streets and shopping malls. As the British Retail Consortium reported last week, in September, footfall increased by 8.0% on High Streets and by 17.3% in shopping malls compared to the same month last year.
While retailers in Europe are bracing for a difficult winter, recent signs point to a resilient commercial environment in the Middle East and North Africa (MENA) region.
MENA Retailers Invest in Omnichannel, Ride the Luxury Wave
Recently published survey data from checkout.com shows that eCommerce especially is proving to be a source of confidence for the region’s retail ecosystem. The survey found that 88% of MENA consumers intend to maintain or increase their eCommerce spending into 2023 while half of all respondents said they expect to spend more money online in the next 12 months.
The growing tendency toward eCommerce in MENA is matched by retailers’ commitment to digital transformation and omnichannel sales.
Last week, Indian retail company Nykaa entered into a strategic alliance with the Middle Eastern retailer Apparel Group to fuel expansion in the Gulf Cooperation Council (GCC) region.
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As reported in the economic times, Nykaa’s parent company, FSN E-Commerce Ventures, will hold 55% of the new business while Apparel Group will take a 45% share.
Marking Nykaa’s first international business alliance and major investment in the GCC region for FSN, the new commercial entity will build multi-brand omnichannel beauty retail operations for Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE).
At a press conference announcing the partnership, Nykaa Co-founder and Chief Executive Falguni Nayar said the company decided to tap the GCC region given its high per capita consumption of beauty products and strong economic growth.
“We see this as a multi-year growth opportunity; I think GCC countries will grow over 10-20 years and Nykaa wants to be part of that,” she stated.
Besides attracting the attention of international brands, domestic enterprises are also looking to take advantage of strong retail growth in the GCC countries.
Digital payment and banking technology provider i2c this week announced a partnership with one of the largest mall operators in the region, Majid Al Futtaim, to launch a new payment and loyalty solution.
Read on: i2c, Retailer Majid Al Futtaim Launch Payment, Rewards Solution
The new solution, SHAREPay, enables members of Majid Al Futtaim’s SHARE rewards program to link as many as 10 debit or credit cards to a single digital wallet, which will automatically earn them points when used across the Majid Al Futtaim ecosystem.
Another retailer that has been expanding its omnichannel tech stack is the luxury brand specialist Chalhoub Group.
Last month, the UAE-based business bought a majority stake in U.K. digital luxury retail platform Threads Styling. In comments shared with The National at the time, Chief Investment Officer Sharmila Murat said Chalhoub was eying up further acquisitions in the luxury retail space as it looked to take advantage of strong demand for high-end brands in the GCC.
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With a strong footing in both in-store and online retail, Chalhoub Group is using technology to deliver an optimized customer experience across channels. This includes eCommerce investments like the Thread Styling deal and a recently announced partnership with Red Ant to deploy the company’s RetailOS platform across its omnichannel operations.
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