So do summer sales in Dubai actually work?

More than 6,000 retailers are participating in this year’s Dubai Summer Surprises (DSS) shopping festival, as they grapple with the annual lull in tourism and traditional ‘expat exodus’, writes Ben Flanagan.

Dubai has two main shop-‘til-you drop extravaganzas – the Dubai Shopping Festival in January, and the six-week-long DSS.

Both have a dizzying array of offers, millions of dirhams in prizes, and entertainment shows designed to lure more people – and, more importantly, their wallets – to the malls.

But the two festivals are at polar extremes in terms of their places on the local retail calendar. While Dubai Shopping Festival is held during the pleasant winter months when tourism is at a high, DSS is all about keeping retailers smiling during the slow summer season.

Diana Jarmalaite, retail analyst at Euromonitor, says DSS is designed to offset the lower numbers of visitors during summer. Summer sales are not the main factor fuelling the growth in the retail industry, she added.

“Keeping in mind the low number of visitors during the summer season, as well as lower numbers of residents – who travel abroad – summer sales are actually the best for retailers to deal with lower demand,” said Ms Jarmalaite. “At the same time, retailers are using the summer sales to promote their own brands, clear the stocks etcetera.”

The 18th Dubai Summer Surprises will be held from 23 July to 5 September and include Dh5.5 million of prizes – including cars, cash and shopping vouchers.

Last year, the 27 participating malls recorded an average 10 percent rise in footfall during the first two weeks of festival, it was reported.

Luxury retailer Paris Gallery said it saw a 20 percent sales increase during the festival as a whole, compared with the same period in 2013. Half of its customers during the festival were visitors to Dubai, with Saudis, Chinese and Russians the top spenders – although the latter are unlikely to be in large number this year, given the decline in the value of the rouble.

Even sales of big-ticket items accelerated last year. Car dealer Arabian Automobiles – the distributor for Nissan, Infiniti and Renault in Dubai and the Northern Emirates – recorded a 39 percent sales growth during DSS in 2014.

Michel Ayat, chief executive of Arabian Automobiles, said at the time there was a “surge” in sales during the period.

“Summer is traditionally perceived as the quietest period in Dubai’s commercial calendar. It is seen as the vacation season, where demand decreases and sales slowdown. But that perception is changing each year,” he told DSS at the time. “The incentives provided by Dubai Summer Surprises have a huge effect on sales, and the automotive market is no exception. This is one of the busiest times.”

The Dubai Shopping Festival (DSF) last January, which marked the 20th anniversary of the event, is similarly important to shop owners given the emirate’s increasingly crowded retail space.

In its first nineteen years, DSF attracted 56 million visitors to Dubai malls, according to the organisers. They spent a total of Dh145 billion– although it is unclear how much of that would have happen anyway, were the festival not to exist.

Nakheel’s Ibn Battuta Mall recorded an increase of 40 percent in consumer spending during DSF this year, according to a statement from the Dubai Festivals and Retail Establishment (DFRE), part of the local tourism board. The January shopping festival is “key to our annual business plan” and helps set the tone for the year, Omar Khoory, Director of Nakheel Retail, told the DFRE in January.

With a raft of new retail developments underway in Dubai, and the emirate’s ambitious aim to pull in 20 million visitors a year by 2020, the two shopping festivals look set to be more and more important in keeping the tills ringing.

Matthew Green, the head of research and consultancy for the UAE at CBRE Middle East, said Dubai Summer Surprises had “become an institution in itself” in the emirate’s marketing efforts in global tourism.

“The summer sales are important from a retail and tourism perspective, as they generate additional visitor flows during what would otherwise be a quiet time for hoteliers and mall owners alike,” he said.