DUBAI // Dubai Outlet Mall may expand to twice its size to satisfy a growing customer base of bargain shoppers, the shopping centre’s director says.

Vishal Mahajan, the director of the first outlet mall in the Middle East, said that despite the economic downturn the shopping centre had seen a steady stream of customers, with between 80 per cent and 90 per cent making a purchase.

“We are exploring the possibilities of an extension,” Mr Mahajan said.

“When we do it, we will add a significant amount of space, at least equal to the existing phase.”

Between 12,000 and 15,000 customers visit the 800-store mall, located on the edge of Dubailand, each weekdayhe said.

On the weekends, the numbers rise to between 20,000 and 25,000 customers.

“We have been approached by a lot of retailers that have missed out on phase one to have a significant presence here,” Mr Mahajan said.

“So the thought is based on demand, rather than just ambition.”

The expansion plans come after the Middle East Council of Shopping Centres warned that the UAE had an oversupply of shop space.

Maher al Shaer, the group’s president, said the oversupply was due to peak at the end of this year.

Four malls have opened in Dubai in the past six months, including the enormous Dubai Mall. This month, the developer Nakheel announced it was delaying its US$3 billion (Dh11.01bn) expansion plans across the country.

But Mr Mahajan said his mall’s bargain offering catered to a different customer segment, which grew during tough times.

Each brand in his centre has signed a contract to offer its wares at a minimum of 30 per cent lower than at other stores, with some discounted by as much as 90 per cent.

Mr Mahajan said visitor numbers at the mall had doubled since it opened in August 2007..

He said retailers consistently told him the stores in his mall were the best, or second-best performing store for their brand in the country. “They say Dubai is over-retailed (but) we still have a niche,” Mr Mahajan said.

Laurent-Patrick Gally, a retail and consumer analyst with Shuaa Capital, said consumers were more cost conscious than before.

“I think the kind of surrounding sentiment previously in the region was that there was an economic miracle occurring,” Mr Gally said. “Anything could happen in the world and it would not impact the region negatively.”

The scale of the global downturn has made it clear that the region is vulnerable, he said.

Consumer confidence in the UAE has dropped to the lowest levels in the region, according to the latest quarterly poll by YouGov and the employment website Bayt.com. The only country that saw consumer confidence rise was Algeria, which was up 1.5 points.

“It’s obviously less than western Europe or in North America,” said Mr Gally. “But still, it has felt the impact.”

Mr Mahajan said visitor numbers should continue to grow as the surrounding residential and leisure projects, such as Dubailand Universal Studios, were developed.

When the mall was built, the catchment area within a five to 10-minute drive was forecast to contain between 400,000 and 500,000 people by 2015.

The economic downturn may have an effect on those numbers, but Mr Mahajan is optimistic that it will help as well. “The phenomena has impacted us as these hard times have made people more aware of the services we offer and make more of an effort to get here,” he said.

(Published by Armina Ligaya on http://www.thenational.ae on April 15. 2009)