GCC retail sector enters bold new era, surging toward $390bln by 2028
Retail is no longer just a transactional space in the region, it is becoming a cornerstone of national development agendas, fostering private investment and energizing adjacent sectors such as logistics, real estate, and tourism.
From Convenience to Customization: A New Consumer Reality
The report highlights the evolution of consumer expectations across the GCC. Shoppers are now more digitally fluent, time-sensitive, and experience-driven. With 87% of consumers in the region using both online and offline channels to make purchases, the retail experience is no longer linear – it is 'phygital.'
Two Segments, One Direction: Food and Non-Food Retail on the Rise
The GCC's retail ecosystem is broadly split into two pillars: food and non-food, each showing robust but distinct growth paths. Food retail is expected to grow from $127.2 billion in 2023 to $162 billion by 2028, supported by rising urbanization and shifting dietary preferences. At the same time, non-food retail – including luxury, electronics, and fashion – is surging faster, with a CAGR of 6.2%, expected to hit $243.6 billion within the same period.
Saudi Arabia and the UAE continue to lead the region, representing over 75% of all retail sales today – a share set to grow further.
Digital Retail Takes Center Stage
From AI-enabled platforms to hyper-personalized e-commerce journeys, retailers are reinventing themselves at breakneck speed. The emergence of 'quick commerce'; ultra-fast delivery in under 30 minutes, is reshaping how consumers access everyday essentials.
Digital-first players like Noon and Amazon.ae are competing head-to-head with legacy giants such as Carrefour and Lulu, who are now embedding AI, live inventory, and omnichannel logistics into their operating models.
Retail Reinvented: From Malls to Micro Fulfillment
The report outlines how organized retail is expanding, with nearly 4 million square meters of new retail space expected by 2028. Yet the future lies beyond square footage, experiential shopping, augmented reality, and predictive personalization are becoming the norm.
'Retailers in the GCC are no longer just selling products, they are curating journeys and building ecosystems,' added Rabie. 'Success hinges on who can best merge the physical with the digital.'
The Rise of Value and Purpose
While luxury retail continues to thrive, a powerful countertrend is emerging: value-driven retail. Private labels, cooperative societies, and budget-friendly chains are resonating with a growing middle class and price-sensitive consumers. Simultaneously, ethical and sustainable retail is gaining momentum, with over half of GCC consumers now prioritizing environmentally responsible brands.
Strategic Imperatives: What Retailers Must Do Next
The report concludes with five strategic calls to action for retailers aiming to thrive in the region's evolving landscape:
Define a compelling USP in a saturated, digitally competitive market. Embrace operational transformation through lean processes, data intelligence, and agile supply chains. Navigate market fragmentation with readiness for consolidation and joint ventures. Build strategic partnerships and ecosystems that drive innovation and speed to market. Adapt deeply to local market dynamics, tailoring everything from inventory to customer service.
A Sector on the Edge of Global Influence
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