Ashish Panjabi: Stability without the spikes for UAE retailers

As the world slowly grapples with rising inflation, increased costs, and the looming threat of a recession, we’ve been blessed to be in the UAE.

As a region that relies on global trade and supply, probably the biggest challenge was supply chain and logistics in 2022.

But this got better as the year went on: shipping schedules improved, we did see some fluctuations in costs because of currencies and interest rates, but overall, despite economic indicators showing that we should have seen a dip or a slowdown in demand, we didn’t, at least not in our region. 

• The UAE’s soaring demand outstrips inflation woes
• UAE businesses see new orders grow at fastest rate since 2009
• UAE’s non-oil foreign trade hits record high of $159bn

2022 has been phenomenal for businesses in the UAE, building on the Russian boom that we have seen over the previous two years, and Expo 2020 Dubai that finished in the beginning of 2022.

The current World Cup effect has also helped the recovering hospitality sector across the neighbouring GCC. 

In 2023 I think we’ll see some stabilisation for businesses. The spike we saw in the last two years will come down and remain steady. We will probably see reasonable growth, but not the likes of what we have seen over the previous two years.

One silver lining for 2023: as one of the few countries and regions that are friendly with China, we will start seeing an influx of Chinese tourists that will return to travel from the New Year, after a few years of lockdown and restrictions. 

With a lot of people moving into the region, Dubai and the UAE has suddenly become the centre of the world for a lot of people, and I don’t think that’s going to stop, given the new regulations in the UAE that are business and investment friendly. 

We will continue to see the UAE dominate the travel and hospitality sectors. This means a boom for one of the largest sectors in the region and this has a ripple effect for other industries. 

With the prospect of a global recession, most businesses are a lot more cost-conscious – certainly retailers are. From a retailer’s perspective, I think the biggest issue is going to be managing costs and the cost of retail real estate is at the top of the list. 

With the real estate sector seeing a higher demand, certain retail landlords are trying to go back to the old (pre-pandemic) ways. We hope that they realise that one-sided conversations are not sustainable in the long-term and that, for businesses to continue to grow and be sustainable, it means that operating costs need to be sustainable too.

Otherwise, we are going to end up with empty shops in key locations or pricing ourselves out of the consumers’ pockets.  

We will also see a lot of volatility as global markets continue to be impacted. The fact that our currency is pegged to the US dollar means we are, to some extent, immune to what’s happening globally to various currencies but others (that travel and do business with the region) would be. 

The tourists coming from the Indian subcontinent, Europe, Africa and other parts of the world are starting find the region to be a little more expensive partly because of currency issues.

Specifically for Jacky’s, we are looking at the opening of new retail outlets in Dubai Hills for Jacky’s Electronics. On the B2B side of the business, we will see more of a move into software to support our robots and various software technologies like RPA and Digital Avatar technologies. 

We launched an organic OEM brand, Eatiq Organic Foods, a couple of years ago that will be expanding its footprints across larger hypermarkets and chains and into other countries across the region as people get more conscious of what they consume.

Ashish Panjabi is chief operating officer at Jacky’s Group