Retailers are moving to smaller kiosk stores in malls to be closer to high-traffic areas and generate more revenue with lower rents, industry insiders say.
Eros Group, which sells Samsung and Hitachi, has opened two kiosks in Abu Dhabi and Sharjah in the past two months and planned to open two or three more by the end of the year, said Deepak Babani, the company's chief executive.
"The traffic near the kiosks is quite good so you have a lot of purchases which are instantaneous," Mr Babani said.
"It's in the centre of the mall and it attracts much more traffic because it's open on at least three sides, sometimes four sides."
Retail sales in the UAE have been hit hard by the economic downturn and were down by as much as 40 per cent in the first half of this year, compared with the first half of last year.
Retailers have been forced to become more creative to grab a slice of shrinking sales, while keeping a close eye on costs.
Mr Babani said the smaller-format booths, which sell electronics such as mobile phones, Mp3 players and cameras, were a major part of Eros's expansion this year because they enabled it to have a presence in the better malls.
It costs more per square foot, he said, but the money spent produced bigger results.
"A kiosk is normally not more than two metres or three metres wide, so you're talking about a small space," he said. "But for the space that you occupy, the revenue is much higher."
Jinshad Haziy, the Dubai-based marketing co-ordinator for InstoreMasters, which makes retail booths, said kiosk sales were 20 per cent higher so far this year than the company's other products, such as digital signs and exhibition stands.
"Even though our customers' budget is less now, people are buying in the fast moving consumer goods department," Mr Haziy said.
Grand Optics opened its first booth, Grand Sunglasses, on the ground floor of Dubai Mall two weeks ago to be closer to the high traffic, said Murad Sharabati, the eyewear retailer's national manager. This booth also helped to draw attention to Grand Optics' other location in Dubai Mall on the second floor, which saw less traffic, Mr Sharabati said.
Mark Morris-Jones, the senior director for retail and industrial property in MENA for the property firm CB Richard Ellis, said retail kiosks were becoming more common as newer shopping centres such as Dubai Mall had wide hallways that were able to accommodate them.
As well, retail kiosks have become more sophisticated over the years, with booths featuring display cases and lighting, he said. Kiosks are also a cheap way for retailers and landlords to boost sales, Mr Morris-Jones said, adding that neither parties needed to spend thousands of dirhams to fit out a full shop.
"You bring a kiosk, which is ready made, plug it into a socket in the floor - that's it," he said. "It's relatively inexpensive for the retailer and landlord to get these things up and running. And from the landlord's point of view, there is very little or no capital required and the rent goes pretty much to the bottom line."
aligaya@thenational.ae
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
How to play the stock market recovery in 2021?
If you are looking to build your long-term wealth in 2021 and beyond, the stock market is still the best place to do it as equities powered on despite the pandemic.
Investing in individual stocks is not for everyone and most private investors should stick to mutual funds and ETFs, but there are some thrilling opportunities for those who understand the risks.
Peter Garnry, head of equity strategy at Saxo Bank, says the 20 best-performing US and European stocks have delivered an average return year-to-date of 148 per cent, measured in local currency terms.
Online marketplace Etsy was the best performer with a return of 330.6 per cent, followed by communications software company Sinch (315.4 per cent), online supermarket HelloFresh (232.8 per cent) and fuel cells specialist NEL (191.7 per cent).
Mr Garnry says digital companies benefited from the lockdown, while green energy firms flew as efforts to combat climate change were ramped up, helped in part by the European Union’s green deal.
Electric car company Tesla would be on the list if it had been part of the S&P 500 Index, but it only joined on December 21. “Tesla has become one of the most valuable companies in the world this year as demand for electric vehicles has grown dramatically,” Mr Garnry says.
By contrast, the 20 worst-performing European stocks fell 54 per cent on average, with European banks hit by the economic fallout from the pandemic, while cruise liners and airline stocks suffered due to travel restrictions.
As demand for energy fell, the oil and gas industry had a tough year, too.
Mr Garnry says the biggest story this year was the “absolute crunch” in so-called value stocks, companies that trade at low valuations compared to their earnings and growth potential.
He says they are “heavily tilted towards financials, miners, energy, utilities and industrials, which have all been hit hard by the Covid-19 pandemic”. “The last year saw these cheap stocks become cheaper and expensive stocks have become more expensive.”
This has triggered excited talk about the “great value rotation” but Mr Garnry remains sceptical. “We need to see a breakout of interest rates combined with higher inflation before we join the crowd.”
Always remember that past performance is not a guarantee of future returns. Last year’s winners often turn out to be this year’s losers, and vice-versa.
