View of part of the Fujairah Corniche and the Hajar Mountains in the Background

Sunday, November 16, 2008

The New Dubai Mall and the Decline of the Mall in the Emirates

Crowds Flock to New Dubai Mall
AMEInfo reports (15 November 2008) that the new Dubai Mall has had crowds of visitors with “more than 60,000 tickets sold for the Dubai Aquarium & Discovery Centre in the first five days, following its opening.”

“The Dubai Aquarium featuring the world's largest acrylic viewing panel offers free attraction while the walk-through tunnel and Discovery Centre assures closer appreciation of the aquatic world. The three distinctive themes at the Discovery Centre, Rainforest, Rocky Shore and Living Ocean, are a special draw among children, who also have the opportunity to touch-and-feel several aquatic species.”

If You Can Get There!
On the downside has been the problem of getting to the Dubai Mall. A report (11 November 2008) in The National indicates that oodles of car park spaces exist and additional parking attendants have been employed but many people have found the roads leading to the Dubai Mall to be heavily congested and the signs for cars and taxis to be confusing. Dubai streets are usually congested so these reports will pose an even greater turnoff to people wondering about checking out the new mall.

What is the Attraction?
Are people simply visiting the special features such as the Ice Rink or are they spending lots of time and money in the shops? I have written earlier about some reasons why people visit malls in the Emirates, the way they provide a shelter from the heat, a place for gathering and a contemporary ‘worship’ place. The malls provide a haven for those who are financially hamstrung and taking time out between jobs. But these reasons for visiting a mall do not necessarily put lots of cash into the coffers of the business owners.

More Malls More Dirhams?
One of the statistics from the Dubai Mall yet to be revealed relates to turnover and the amounts of money that have been received and banked. This new mall has opened in a month when the world is experiencing a great financial crisis and the UAE may have better cushioning than other countries but it is not immune from the difficulties.

Does the money being spent at the new Dubai Mall represent dirhams that would have been spent at other UAE malls and if so, what impact are these new malls having on the older, more established malls?

Is the UAE Shopping Mall in Decline?
In a Newsweek article (12 November 2008) entitled ‘Is the American Shopping Mall Dead?’, commentators are detecting the decline of the mall, if not pronouncing the last rites. New malls are being built of enormous proportions and with Disneyland-styled attractions to pull in the parents with their kids. But older, less attractive malls are declining and web sites like Deadmalls DOT Com have become virtual cemeteries for American shopping malls. The financial crisis may have simply accelerated a trend that was already taking place.

The Newsweek article gives these sobering figures:
“Georgia Tech professor Ellen Dunham-Jones, coauthor of the forthcoming book ‘Retrofitting Suburbia,’ which focuses on the decline of [US] malls and other commercial strips [says that] today, nearly a fifth of the country's largest 2,000 regional malls are failing, … and according to the International Council of Shopping Centers, a record 150,000 retail outlets, including such mall mainstays as the Gap and Foot Locker, will close this year.”

Read the rest of the article and see if you think that the financial recession will affect the UAE malls, curtail their income and ultimately lead to their death. Will the big brand, luxury shops be gradually replaced by ‘Two Dirham Shops’ that cater for lower budgets? Will the financial recession put the clampers on international tourists who have enjoyed coming to the UAE for a week to do their annual big shop? And will the introduction of the proposed VAT provide the extra nail in the coffin for those who have been attracted in the past to this ‘tax free’ shopper’s paradise?

Dr Geoff Pound

Image: One of the many signs that are being erected outside shopping malls in the USA. This sign stands outside the Southtown Mall in Fort Wayne, Indiana. (Photo courtesy of Deadmalls DOT Com at the above link).