Overview of the UAE Retail Food Sector

 DRAWN by the country's affluence, food suppliers from all over the world vigorously compete for market share in the United Arab Emirates. Expatriates represent about 85 per cent of the total UAE population and, in spite of the recent financial slowdown, the country still boasts of one of the highest per capita income in the region
Products from Europe and Asia products hold a proximity advantage to those from the United States – which translates to lower freight costs. Companies that successfully export to UAE are generally able and/or willing to meet the emirates' food import labelling requirements, including Arabic labels and production and expiration dating, which can give them an advantage food companies reluctant to modify labels for a relatively small market.
After several years of rapid growth, retail food sales slowed during the early part of 2009 as global economic conditions worsened, but many retailers report that sales have begun to rebound. In the absence of official data, major retailers estimate the annual value of the UAE retail market at $5 billion and the expected annual growth in retail sales at 10 to15 per cent.
An estimated 85 per cent of retailed foods are imported or made locally with imported ingredients. Locally processed food products are limited in range and are most competitive in the categories of snack food, juices, poultry, bottled water, dairy products and some confectionery items.
The introduction of hypermarkets and superstores is re-shaping the retail sector. The number of hypermarkets has increased to 70, a 15 per cent increase in the past three years. Trade sources indicate that number of retail stores is expected to increase, albeit at a slower pace.
Although retail development is more focused in Abu Dhabi, Dubai and Sharjah, the three largest emirates of the UAE, which account for nearly 75 per cent of the population, major retailers are including smaller emirates in their expansion plans. Consumers in the three large emirates tend to shop more at larger stores and less at smaller grocery and convenience stores; such stores are relied upon for last minute food needs. In the more distant suburbs and the less-populated areas of the country, however, grocery and convenience stores play an important role in the retail business.

Distribution channels
Hypermarkets, superstores and supermarkets, despite their limited number, are gradually gaining larger market share, accounting for about 50 per cent of all retail sales. Smaller-sized groceries and convenience stores account for the balance.
Despite the growing market share for larger stores, rapid development of residential areas in recent years has prompted some retailers to focus on smaller neighbourhood or "express" outlets that consumers can reach more easily in new areas and neighbourhoods. Small stores have always been a feature of UAE food retailing, but these newer stores tend to more closely resemble western-style outlets in terms of product selection and ambiance. There are a limited number of specialty stores offering gourmet foods. This is a relatively new trend in a price-conscious market.
Co-operatives are a unique feature of the UAE retail sector and account for about 30 per cent of UAE retail sales. Some co-ops receive support from the local government of the emirate in which they are established. They also attract broad-based support, particularly from UAE nationals, who usually hold shares in these coops and receive an annual rebate on their purchases. Co-ops are known for competitive prices on a more limited range of products.
Many stores extend their range of services to include sections for cooked products, ready-to-cook prepared foods, home  delivery, cafeterias, banks, bakeries, laundries, audio/video shops, pharmacies, flower shops aAir Force 1 Foamposite