{"text":[[{"start":8.22,"text":"Gulf consumers are tightening their belts as the Iran war weighs on confidence and drives up import costs, piling further pressure on some of the region’s largest retail groups after a decline in high-spending tourist visits."}],[{"start":21.48,"text":"Lulu Retail, one of the region’s biggest supermarket operators, last week said “weak consumer sentiment” had hurt non-food sales and reported a 28 per cent fall in profits for the nine months to September."}],[{"start":34.52,"text":"Majid Al Futtaim, the Carrefour franchise owner for the Middle East, said first-half retail revenues fell 6 per cent year-on-year, with the decline reflecting “more challenging consumer conditions — particularly in the [United Arab Emirates]”."}],[{"start":54.44,"text":"Sufiyan Akhtar, vice-president at Alpen Capital, an investment banking advisory, said: “The ongoing geopolitical uncertainty is likely to make consumers more cautious with their spending, particularly when it comes to discretionary purchases.”"}],[{"start":62.88,"text":"The war, which began on February 28 when the US and Israel attacked Iran, has inflicted a significant toll on the region’s tourism industry. Dubai Duty Free’s revenue was down 25.3 per cent in the first seven months of the year as passenger traffic declined, according to Alpen."}],[{"start":80.36,"text":"Gulf economies in the past two decades invested heavily in developing non-oil sectors including tourism and retail to reduce dependence on energy revenues. Cities such as Dubai and Doha built shopping precincts to appeal to an expanding affluent population and deep-pocketed overseas visitors."}],[{"start":98.08,"text":"But a prolonged softening in consumer spending could pose a fresh challenge to that economic model, just as the Middle East conflict has disrupted air travel and trade. It could force businesses to cut costs by laying off employees and scale back their hiring and expansion plans, further eroding one of the economy’s central pillars."}],[{"start":116.96,"text":"The Majid Al Futtaim conglomerate, which became known for developing the Mall of the Emirates that houses an indoor ski slope, this year laid off hundreds of employees, said people familiar with the matter."}],[{"start":126.24,"text":"Another retail group, Jashanmal, also cut its workforce, the people said. Many of the high-end luxury shops in Dubai’s marbled malls are seeing fewer well-heeled clients, according to various shopkeepers who spoke to the FT."}],[{"start":139.32,"text":"Majid Al Futtaim declined to comment and Jashanmal did not respond to a request for comment."}],[{"start":144.96,"text":"With the Gulf countries relying heavily on food imports, the quasi-closure of the Strait of Hormuz has forced businesses to opt for costlier alternatives brought in over land or by air, pushing up the cost of sourcing goods."}],[{"start":157.6,"text":"Alpen Capital’s Akhtar said: “Any increase in sourcing and logistics costs could translate into higher retail prices, putting pressure on consumers’ purchasing power and potentially weighing on demand.”"}],[{"start":170.16,"text":"Industry executives and analysts said Saudi Arabia and the UAE’s domestic consumer base helped partly cushion the blow from the war. But they also warn that inflation caused by higher shipping costs is weighing on consumer sentiment as the conflict nears its ninth month."}],[{"start":185.92,"text":"For some within the industry, the war is also creating opportunities."}],[{"start":189.84,"text":"Dubai-based Union Coop, the UAE’s largest consumer co-operative which attracts more budget-conscious shoppers, posted a nine-month rise in net profit year-on-year."}],[{"start":199.88,"text":"Nine-month profit at Americana Restaurants, the region’s operator of fast-food brands such as Pizza Hut and Taco Bell, also soared 60 per cent year-on-year as it reaps the rewards of a years-long expansion plan across the region."}],[{"start":213.28,"text":"Customers are increasingly eating out in some of the group’s more affordable outlets such as KFC and Hardee’s, according to an executive at the group."}],[{"start":220.52,"text":"“When disposable incomes go down, people tend to go for more entry-level options and we have those in our portfolio,” the executive said."}],[{"start":228.72,"text":"For Debashish Mukherjee, consulting firm Kearney’s regional lead for consumer and retail, shoppers trading down might have lasting effects on the industry."}],[{"start":236.96,"text":"“It creates demand for homegrown brands and local champions,” he said. “The kitchen paper you buy no longer has to come from Switzerland or a global multinational, and if you have small children, neither do the diapers.”"}],[{"start":249.74,"text":"It also introduces to the country “a wide range of price points, so people across many income levels can live well here”, Mukherjee said. “That is a strength this country has over many other markets,” he said."}],[{"start":267.36,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1794382594_6161.mp3"}