Middle East retail hotspots rise in global Kearney development index

28 February 2024 Consultancy-me.com 4 min. read
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The MENA region is well positioned to become one of retailing’s next big hot spots, according to the Global Retail Development Index (GRDI) from Kearney, with 8 of the top 40 slots in the index held by countries in the region.

With the aim to shed light on the most promising retail environments among emerging economies, the GRDI evaluates economic stability, government policy, competitive activity, demographics, and other considerations. Since Kearney concepted its ranking, the countries identified have often indeed become top destinations for retailers.

The 2024 edition places the spotlights on more traditional emerging destinations, such as India and China (both in the top 5), but also on three rapidly rising regions in particular.

Middle East retail hotspots rise in global Kearney development index

Source: Kearney analysis

Alongside several hotspots in Latin America and Central Asia, MENA is described as a region that sits at the forefront of retail's next wave of growth. Notably, the Kingdom of Saudi Arabia leads the region with a 3rd spot overall, but also Egypt and Turkey rank in the top 10. Jordan and Morocco are top 20 players, while Iran, Algeria and Tunisia all feature in the top 40.

“An expanding, younger, urban, and progressively more affluent population in many MENA nations is sustaining fast-paced retail growth today and for the foreseeable future,” said Debashish Mukherjee, partner at Kearney.

The Kearney report notes that population growth and rising total disposable income in MENA nations will drive further spending growth in the coming decades, with spending levels further lifted by a significant rise in the female labor force participation rate, especially in Saudi Arabia.

Saudi Arabia

Thanks to an overall strong economic position and a robust shift away from a dependence on the oil and gas sector, Saudi Arabia rose a remarkable nine points in this edition of the Index to third place overall.

Saudi Arabia is actively reducing its reliance on oil through economic reforms, though the activity still makes up the lion’s share of its GDP. In 2023, lower oil revenues led to a slight slowdown in macroeconomic growth, but non-oil GDP is expected to have remained around 5% in 2023.

Regulatory changes in KSA aim to encourage diversification, stimulate private sector growth, and enhance digital transformation. The ambitious net-zero goals set out in the country’s Vision 2030 roadmap have largely been on track.

The retail landscape is evolving with these new economic shifts, reflecting a dynamic and diverse market. There is a lot of growth in e-commerce specifically, where big annual sales have been catching on successfully.


In sixth place overall in the ranking, Egypt rose one point since the previous Index was released. That is despite the country’s economic growth facing some challenges due to border tensions and a weakened currency, with a revised growth rate of around 4%.

Another issue is that inflation is high, reaching 23% in 2023 and projected to be 32% in 2024, leading the government to cut prices on staple foods. The focus is on information technology and offshoring to boost the economy, aiming to triple export revenue and create job opportunities.

Despite these various challenges, Egypt anticipates growth of over 11% in the retail sector, especially with the rise of shopping malls and increasing interest in e-commerce among the younger generation. There are plans for around $650 million of investments into new projects and expansions to existing commercial and entertainment centers in major cities like Cairo, Alexandria, and Giza.

A changing retail landscape

Across the 40 retail hotspots studied, Kearney said that a number of similar developments are unfolding.

E-commerce is projected to be the fastest growing retail channel, in position to account for approximately 24% of retail sales by 2027, up from around 21% today. Most of the growth will be captured by marketplaces such as Amazon, eBay, Etsy, AliExpress, Rakuten, Lazada, Taobao, Walmart, Mercado Libre, and others.

Retailers will therefore be stimulated to invest more in their omnichannel operations, further blending their customer experience and sales efforts across physical and online channels. The use of digital wallets will continue to grow, and emerging technologies including augmented reality and the metaverse will disrupt the landscape.