The GCC retail sector is undergoing a sweeping transformation. Once dominated by traditional models, the sector has now emerged as a key enabler of economic diversification, technological innovation and consumer-centric growth.
The sector is expanding rapidly and is projected to reach over $390 billion by 2028, driven by digital innovation, changing shopper behavior and strategic government initiatives, according to a new report by LOGIC Consulting.
Retail is no longer just a transactional space in the region, it is becoming a cornerstone of national development agendas, fostering private investment and energizing adjacent sectors such as logistics, real estate and tourism.
Saudi Arabia and UAE lead GCC retail sector
The report also highlights the evolution of consumer expectations across the GCC. Shoppers are now more digitally fluent, time-sensitive and experience-driven. With 87 percent of consumers in the region using both online and offline channels to make purchases, the retail experience is no longer linear.
The GCC’s retail ecosystem broadly includes two pillars: food and non-food, each showing robust but distinct growth paths. Food retail is expected to grow from $127.2 billion in 2023 to $162 billion by 2028, supported by rising urbanization and shifting dietary preferences.
At the same time, non-food retail – including luxury, electronics, and fashion – is surging faster, with a CAGR of 6.2 percent, expected to hit $243.6 billion within the same period.
Saudi Arabia and the UAE continue to lead the region, representing over 75 percent of all retail sales today – a share set to grow further.
Digital retail takes center stage
From AI-enabled platforms to hyper-personalized e-commerce journeys, retailers are reinventing themselves at breakneck speed. The emergence of “quick commerce,” ultra-fast delivery in under 30 minutes, is reshaping how consumers access everyday essentials.
Digital-first retail players in the GCC like Noon and Amazon.ae are competing head-to-head with legacy giants such as Carrefour and Lulu, who are now embedding AI, live inventory and omnichannel logistics into their operating models.
The report also outlines how retail is expanding, with nearly 4 million square meters of new retail space expected by 2028. Yet the future lies beyond square footage; experiential shopping, augmented reality and predictive personalization are becoming the norm.
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Value-driven retail emerges
While luxury retail continues to thrive, a powerful countertrend is emerging: value-driven retail. Private labels, cooperative societies and budget-friendly chains are resonating with a growing middle class and price-sensitive consumers.
Simultaneously, ethical and sustainable retail is gaining momentum, with over half of GCC consumers now prioritizing environmentally responsible brands.
As the GCC region becomes a hub for tech-savvy, high-income, and experience-driven consumers, the retail sector will become a defining pillar of the GCC’s post-oil economy.
