Oxford Business Group releases report
KUWAIT CITY, June 2: Kuwait’s retail sector is expected to witness strong growth in the second half of this year, despite the fluctuation in consumer behavior and changes in policies that may affect sales, particularly those related to job creation and the reduction of expatriates in the labor market, reports Al-Rai daily.
According to a report by Oxford Business Group, the growth will be driven by increased tourism activity, GDP per capita and number of retail stores, based on last year’s retail sales forecast (2018) of $16.7 billion, oil by about 6.7 percent. On the other hand, the Oxford Business Group report showed that while the growth of the sector appears to be strong in the near term, Kuwaiti consumer confidence has fluctuated in recent months, which may reflect shifts in economic outlook, indicating that uncertainty about public spending income, political proposals affecting expatriates and regional tensions have all affected the morale.
Consumer sentiment rose to 108 points in February from 103 points in January, before retreating in March to 103 points, according to the Consumer Confidence Index. Of the six sub-indices, employment opportunities only improved between February and March, rising from 146 to 148 points.
On the other hand, the report explained that future employment growth and increased potential profits would be good for the retail sector, where increased labor participation rates could boost spending power. Given their large disposable income and the fact that they represent about 70 percent of the population in Kuwait, expatriates contribute significantly to the local retail market in terms of sales and employment.
According to the report, the retail and wholesale sector is more than 500,000 jobs, second only to the public sector, indicating that expatriates have about 480,000 jobs. In this context, the report stressed that the policy of “recruitment” jobs aimed at reducing the number of expatriates in the workforce, especially in the public sector, could have a negative impact on retail sales.
According to the report, expatriates employed by the state are increasingly exposed to layoffs, with more than 2,500 expatriate contracts being canceled in the first five months of this year, and 3,100 layoffs over the past year. Although there was an increase in total arrivals, this growth was associated with the implementation of new infrastructure and development projects, with the recruitment of blue collar workers in support of employment figures.