Middle East Retail Market Size to Surpass USD 3,028 Billion by 2033, at a CAGR of 4.04%

Middle East Retail Market Overview

Market Size in 2024: USD 2,120 Billion

Market Size in 2033: USD 3,028 Billion

Market Growth Rate 2025-2033: 4.04%

According to IMARC Group's latest research publication, "Middle East Retail Market: Industry Trends, Share, Size, Growth, Opportunity and Forecast 2025-2033", The Middle East retail market size was valued at USD 2,120 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 3,028 Billion by 2033, exhibiting a CAGR of 4.04% during 2025-2033.

How AI is Reshaping the Future of Middle East Retail Market

• Smart Personalization at Scale: Over 71% of UAE retailers now prioritize AI investments, with intelligent systems analyzing customer behavior to deliver tailored recommendations. Brands like Majid Al Futtaim are using AI-powered tools to match shoppers with products based on past purchases, browsing patterns, and even local cultural preferences, boosting conversion rates significantly.
• Transforming Inventory and Supply Chains: AI-driven demand forecasting is helping retailers predict what customers want before they know it themselves. Saudi Arabia's partnership to develop 14 smart warehouses in Jeddah showcases how AI optimizes inventory management, reduces waste, and ensures products reach shelves faster—cutting costs by automating complex logistics decisions.
• Revolutionizing Customer Service: AI chatbots and virtual shopping assistants are becoming the norm across the region, with 53% of MENA shoppers already using AI-powered visual search tools. Dubai-based retailers are deploying conversational AI that understands Arabic dialects and cultural nuances, making shopping more accessible and reducing the burden on human customer service teams.
• Dynamic Pricing and Fraud Detection: Retailers are leveraging AI to adjust prices in real-time based on demand, competition, and inventory levels. The UAE's AI in retail market, valued at USD 338 million, is projected to hit USD 1.3 billion, with much of this growth driven by security systems that detect fraud patterns and protect both businesses and consumers from cyber threats.
• Experiential Retail Through AR and AI: The Middle East is embracing virtual try-ons and AR shopping experiences, with revenue from AR in retail reaching USD 369.2 million. AI stylists like Taffi's "Amira" are trained on local fashion preferences, helping customers mix and match outfits while promoting sustainable shopping by encouraging reuse of existing wardrobe pieces.

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Middle East Retail Market Trends & Drivers:

The Middle East retail scene is experiencing a massive transformation, fueled by government-backed economic diversification programs. Saudi Arabia's Vision 2030 is pouring investment into non-oil sectors, with retail emerging as a major beneficiary. The Kingdom's non-oil GDP grew 4.5% in recent periods, with retail, hospitality, and construction leading the charge. Major shopping festivals like Dubai Shopping Festival and Riyadh Season are pulling in millions of visitors, driving foot traffic and sales volumes through the roof. These initiatives aren't just about events—they're reshaping consumer culture and positioning the Gulf as a global retail destination.

E-commerce is absolutely exploding across the region, fundamentally changing how people shop. With 92% of urban areas in the UAE now covered by same-day delivery, online platforms like Noon, Amazon.ae, and emerging players are capitalizing on mobile penetration rates that exceed 70% in major markets. Digital payments account for 79% of retail transactions in Saudi Arabia, up from 70% just last year. The shift isn't just about convenience—it's about trust. According to PwC Middle East Consumer Insights, 71% of online shoppers now feel confident about product authenticity and return policies, removing one of the biggest barriers to digital adoption.

Tourism is becoming a retail goldmine, particularly in the luxury segment. The Middle East leads global luxury growth projections at 4-6%, far outpacing Europe and China. Dubai and Abu Dhabi are attracting the world's highest net inflow of high-net-worth individuals—an estimated 6,700 in recent periods—creating sustained demand for premium goods. Saudi Arabia is rapidly catching up, with luxury retail expanding as Riyadh and Jeddah position themselves as shopping destinations. Bain & Company reports that tourists contribute significantly to retail spending, especially in luxury fashion, electronics, and souvenirs. Projects like NEOM and Red Sea Global are building entire retail ecosystems around experiential tourism, ensuring the pipeline of shoppers remains strong for years to come.

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Middle East Retail Industry Segmentation:

The report has segmented the market into the following categories:

Product Insights:

• Food and Beverages
• Personal and Household Care
• Apparel, Footwear and Accessories
• Furniture, Toys and Hobby
• Electronic and Household Appliances
• Others

Distribution Channel Insights:

• Supermarkets and Hypermarkets
• Convenience Stores
• Specialty Stores
• Online Stores
• Others

Country Insights:

• Saudi Arabia
• Turkey
• Israel
• United Arab Emirates
• Iran
• Iraq
• Qatar
• Kuwait
• Oman
• Jordan
• Bahrain
• Others

Competitive Landscape:

The competitive landscape of the industry has also been examined along with the profiles of the key players.

Recent News and Developments in Middle East Retail Market

• April 2025: Majid Al Futtaim launched an ambitious luxury retail expansion with over 30 new stores across UAE and Saudi Arabia, including five standalone Eleventy locations and the regional debut of Corneliani. The expansion builds on a record-breaking year with 26% growth in its Lifestyle business and 31% surge in digital sales, reflecting strong consumer demand for premium Italian brands.
• November 2024: Al-Futtaim Electric Mobility partnered with Parkin PJSC to electrify Dubai's parking fleet with 40 BYD Song Plus hybrid vehicles, supporting UAE's Green Mobility Strategy 2030. This collaboration marks a significant shift toward sustainable retail logistics and last-mile delivery infrastructure in the region.
• September 2025: Electronic grocery platforms in Saudi Arabia saw commercial registrations for delivery services surge 13% year-on-year, while traditional grocery store registrations declined 4%. Platforms like Nana, Ninja, and international competitors Amazon and Kita are reshaping retail as consumers migrate toward faster digital delivery models supported by neighborhood micro-warehouses.

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