Apparel and Footwear Specialist Retailers in Saudi Arabia

PROSPECTS

Reduced customer spending due to economic slowdown favours growth of value brands

Apparel and footwear specialist retailers declined in current value terms in 2018, affected by the economic slowdown due to the implementation of VAT and a general increase in the cost of living, leading consumers to be more careful about their spending patterns. They preferred to make planned purchases and tried to evaluate options.

Retail salesforce changing due to new Saudization rules

Due to economic restructuring and the emergence of Saudization, channels such as apparel and footwear specialist retailers will be impacted. While many players welcomed the move, certain challenges must be addressed with regards to customer service during the transition period.

Social media and Western fashion influence consumer trends and choices

Both female and male consumers in Saudi Arabia tend to stay up to date with the latest global fashion trends, which is supported by high internet penetration in the country. Customers frequently follow social media bloggers and celebrities from both the Arab and Western worlds for inspiration and thus they are not only up to date with the latest product launches but also with the latest trends.

COMPETITIVE LANDSCAPE

Continuing dominance of key franchisers

Key local franchisers remained the most important entity for foreign investors in apparel and footwear specialist retailers in Saudi Arabia. Al Bandar Trading Co continued to lead the channel with franchise rights for brands by Landmark Group, Max/City Max and Splash as well as international brands such as Bossini, Koton and Steve Madden.

Players conduct constant promotions to remain competitive

To boost sales, most leading brands placed regular promotions and discounts throughout the year, especially during the second half of 2018. Efforts were made to entice customers by placing tempting deals and offers.

Internet retailing to impact sales of store-based retailers

Internet retailing continues to gain wider adoption and this will be supported by improved transportation and logistics networks. Consumers find online shopping sites convenient as they enable them to save time and avoid busy shopping centres.

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