From truffles to watches, UAE luxury retail surges
By Martina Fuchs
DUBAI (Reuters) - Unemployment and rising food prices may be hurting the poor elsewhere in the Middle East and shaking governments to their foundations.
But in Dubai, whether it's chocolate truffles at $272 apiece or jewel-encrusted Dior mobile phones, shoppers are biting into luxury retail again after a downturn hit consumer spending in the Gulf Arab emirate.
Dubai's debt woes and the global financial crisis soured the appetite of the United Arab Emirates' high-end clientele, but the Gulf financial and tourism hub is striving to win back its crown as a world luxury capital.
Chocopologie, a chocolatier which claims to sell the world's most expensive truffle "La Madeline au Truffe" for 1,000 dirhams ($272) apiece, opened its boutique cafe in Dubai in December and already plans another in Abu Dhabi.
"Luxury retail demand is rising," manager Christel Mock said, as she sat in a dark red velvet armchair adorned with gold ornamentation. "Cash is flowing again, and it's more acceptable to spend money on luxury delicacies."
Dubai, known for opulent hotels and man-made palm-shaped islands, was the second most attractive city in the world for retailers in 2009, just behind London but ahead of Paris and New York, according to a survey by consultancy CB Richard Ellis.
But retailers in Dubai saw sales slump 45 percent that year when Dubai was hard hit by the global financial crisis and its own real estate crash, according to some industry estimates. Retail started a slow path to recovery in 2010.
The global recession saw luxury items drop off the shelves in status-conscious Dubai before staging a comeback led by demand by wealthy Emiratis and returning tourists from Russia, China and India, retailers and analysts said. Continued...