The COVID-19 pandemic had a huge influence on the shopping habits of Kuwaitis in 2020 and 2021 as a big shift towards e-commerce was seen. Historically, e-commerce has struggled to gain a mainstream presence in Kuwait and this is a reflection of the strong preference among the population for shopping in stores, an activity which is widely regarded as a leisure pursuit, along with hanging out in shopping centres.
With the reopening of the society and economy of Kuwait as the impact of the COVID-19 pandemic receded over the course of 2021, retail expenditure recovered after a dismal year for the retailing industry in 2020. While sales remained far lower than the pre-COVID-19 levels recorded in 2019, growth rates rebounded as shoppers returned to stores and spending rose across numerous consumer goods industries, including notably apparel and footwear and beauty and personal care.
The majority of people living in Kuwait are expatriates, with Kuwaiti nationals only accounting for less than one-third of the population at the end of the review period. There is a clear difference between the shopping habits of Kuwaitis and expatriates.
The population of Kuwait can be split into four main income groups. Very low-income consumers tend to make just enough money to survive and are usually Asian expatriates working in blue-collar jobs.
Kuwait’s transport infrastructure is very well-developed and cars are the main mode of transport. While in the past this has led to traffic congestion in Kuwait city, restrictions on the movements of the population in response to the COVID-19 pandemic and the shift towards working from home that has been seen among the country’s white-collar professionals, office workers and service industry personnel since the onset of the COVID-19 pandemic and the exodus of expatriates due to diminishing work opportunities as a result of the Kuwaitisation programme and the COVID-19 pandemic have drastically reduced the amount of the traffic on the country’s roads.
Informal retailing is not very common in Kuwait, owing to most consumers having enough money to buy via formal retailing and because there is provision for subsidised food. However, there are a few areas around the country where informal retailers are permitted to operate.
Moderate growth is expected to be seen in Kuwait’s retailing industry over the forecast period. One of the factors that is expected to put pressure on demand for a wide range of goods is the reduced numbers of foreigners living in the country due to the impact of the Kuwaitisation programme and the COVID-19 pandemic, which has diminished the consumer base substantially and left the country facing a shortage of skilled labour.
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Retailing
Sales of new and used goods to the general public for personal or household consumption. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts, fuel. Also excludes foodservice, rental and hire and wholesale industries (Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retailing is the aggregation of Store-based retailing and Non-store retailing. Retailing excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, ie retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer which is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retailing. In relation to click and collect purchases (i.e. where purchases are made over the internet but picked up at store) where the sales data is attributed depends on where the payment is made: If payment is made in store, then the sale is included in store-based sales. If payment is made over the internet, then the sale is included in internet retailing.
See All of Our DefinitionsThis report originates from Passport, our Retailing research and analysis database.
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