Saudi retail sales will grow from around $77 billion in 2008 to $96 billion by 2013, a study on the Kingdom's retail said on Friday. Key factors behind the forecast growth in Saudi Arabia's retail sales are: strong underlying economic growth, rising disposable incomes, increasing acceptance of the concept of modern retailing, a youthful population and an enlarged consumer base created by the improved position of women in society. Saudi Arabia's nominal GDP was $490.57 billion in 2008, with growth slowing to an estimated 2.1% in 2009 as the economy is hit by the global economic downturn. Average annual GDP growth of 2.8 percent is now predicted between 2008 and 2013. With the population increasing from 24.4mn in 2008 to an estimated 26.5million by 2013, GDP per capita is predicted to rise by nearly 18 percent by the end of the forecast period, reaching US$23,699. “We believe consumer spending per capita will increase from US$4,220 in 2008 to US$5,251 by 2013,” the report said. The retail sector benefits from the large number of Muslim tourists visiting the Kingdom to take part in the Haj and Umrah pilgrimages every year. Sales of gifts and souvenirs in 2008 were estimated to have risen by at least SR4 billion ($1.1 billion) due to shopping by hajj pilgrims, according to a Gulf News report. Increasing urbanisation is also driving retail sales. In 2005, nearly 89 percent of the population was classified by the UN as urban, and this is forecast to increase to more than 90 percent by 2010. The UN also described more than 57 percent of the population as economically active in 2005, with this proportion forecast to exceed 59 percent by 2010 and 66 percent by 2015. About 38 percent of the population were in the crucial (for retail sales) 20-44 age range in 2005, and the UN forecasts that this will rise to about 46 percent by 2015, an Francisco-based Gap is among the latest international retailers to enter the market. It plans to open 44 Gap stores (and variations) and 10 Banana Republic stores in Saudi Arabia by 2012.
