Kuwait remains unmoved in sixth position in BMI's regional Food & Drink Business Environment Ratings table for Q409. Its low placing largely reflects its modest per capita food consumption growth outlook. On the economic front, BMI expect the energy-exporting Kuwaiti economy to contract by 1 percent in 2009, which is a fairly resilient appraisal under the backdrop of the global economic meltdown. Nevertheless, despite a GDP per capita close to $30,000 and a reasonably sized population of 3.2mn by regional standards, Kuwait's mass grocery retail (MGR) sector has yet to truly take-off. Government legislation restricting private retailers from launching in residential areas has affected private retailers as discussed in BMI's recently published Kuwait Food & Drink Report for Q409. Kuwait's grocery retail landscape is dominated by the cooperative segment, which differentiates it from the wider Gulf region where the supermarket and hypermarket segments account for the bulk of MGR sales. The Union of Consumer Cooperative Societies (UCCS) accounts for the majority of grocery sales. To provide a comparison, BMI estimate that the size of the UAE's hypermarket segment by value sales to have been almost 2.5 times larger than Kuwait's in 2008. In the same year, BMI estimates that co-operative stores accounted for almost 60 percent of MGR sales. However, through to 2013, BMI has forecast cooperative store sales to increase by a modest 13.2 percent. The segment is expected to lose impetus as a greater proportion of consumers trade up to modern supermarkets and hypermarkets. Should the government relax its cooperative supporting legislation, this process will probably accelerate. Despite these regulatory challenges, Kuwaiti MGR operator Sultan Group has established itself as the country's largest private retailer. It currently operates 11 large retail outlets as well as a growing number of convenience stores. The convenience segment remains Kuwait's least developed. Through to 2013, Sultan is well placed to capitalize on BMI's forecast that store sales will increase by 20 percent from a low base to reach $0.11 billion. Earlier this quarter, the UAE-based retailer EMKE Group announced its intention to invest AED1.5 billion (KWD117.5 million) through to 2010 to expand its hypermarket presence in Abu Dhabi. It is also committed to increasing its presence in a number of regional markets, which should result in further investment into Kuwait through its Lulu banner. Carrefour also has a hypermarket presence in Kuwait through its joint venture with the UAE-based retailer Majid Al Futtaim (MAF). It currently only operates one hypermarket store in the country. Both retailers should benefit from BMI's forecast that through to 2013, hypermarket sales will increase by 21.2 percent and reach $0.51 billion. __
