Boston, MA -- (ReleaseWire) -- 04/01/2014 -- We remain bullish on the UAE's consumer outlook, as a wealth of data point to continued growth. With consumer and business sentiment looking positive, the outlook for household consumption is particularly bright over the coming quarters. Following real GDP growth of 6.2% in 2012 and an expected 4.1% in 2013, we expect the economy to expand by a more moderate 3.4% in 2014. Our country risk team forecasts real private final consumption growth of 6.5% in 2014, but thereafter to rise, up to 8.8% in 2016 and 2017 and beyond.
Headline Industry Data
- 2014 food consumption growth (local currency terms): +5.5%; compound annual growth rate (CAGR) to 2018: +5.7%.
- 2014 per capita food consumption growth (local currency terms): +3.9%; CAGR to 2018: +4.4%.
- 2014 total soft drinks sales (local currency terms): +6.0%; compound annual growth rate (CAGR) to 2018: +6.3%.
- 2014 mass grocery retail sales (local currency terms): +8.4%; compound annual growth rate (CAGR) to 2018: +8.7%.
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Key Industry Trends And Developments
Amira's Basmati Rice Acquisition Deal Closes: UAE-based Amira Nature Foods completed the acquisition of Germany-based premium-branded rice distributor Basmati Rice for an undisclosed amount. Amira will be offering 10 varieties of rice under the ATRY, Scheherazade, Sultan, Sativa and Sadry brands.
The aim is to expand Amira's sales in international markets, including Germany, Europe and the US, according to the firm's CEO, Karan A Chanana. The company, which generated revenue of US$9mn in 2013, expects to boost current FY14 earnings through this acquisition. Amira Nature Foods reported a jump in full-year earnings, boosted by growing demand for basmati rice. For the year to March 31 2013, EBITDA rose 30.5% to US$52.2mn, while net profit rose 61.2% to US$19.2mn. Full-year sales were up 25.7% to US $413.7mn.
Denny's To Venture Into Middle East: US restaurant chain Denny's has signed a franchise agreement with UAE-based Advance Investment, an affiliate of Food Quest Restaurant Management, to open restaurant outlets across the Middle East. The restaurant chain plans to launch its 30 restaurants in the Middle East over the next 10 years, with its first opening of the restaurant in the UAE by 2015, increasing the chain's international ventures to 60 restaurants. The deal will allow Denny's to explore the US$30bn Middle East franchise market and will mark the company's footprints in the UAE market. Developed infrastructure and facilities such as malls and the purchasing power of residents and travellers are key factors that attract international investors, according to Franchise Middle East Consultancy's CEO, Mana Al-Suwaidi.
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