Kuwait is facing unprecedented challenges and is enforcing major restrictions
to protect its citizens yet those measures had a severe business impact.
Global Markets is utilizing its wealthy current and historic primary
research findings, Umbrella platform, and advanced assumption modelings
to illustrate the daily revenues impact of the Coronavirus while
comparing it to previous years.
COVID-19 Impact by Industry
The government’s lockdown and social distancing efforts are continuing to
affect the fashion, foodservice, and entertainment sectors since the
last week of February. In February, all three industries dipped to as
low as 87% but slightly recovered in the first few days of March. At
that time, COVID-19 was a new and an unfamiliar crisis that led a large
consumer segment to shift their spending towards necessary goods despite
having all retail malls and entertainment facilities open. The
government took serious measures to contain the arrivals and manage
their exposure to the virus which developed consumer confidence that
pushed the different industries to climb towards recovery. This
short-lived growth was shattered after new governmental measures and
public announcements of the importance of social distancing were
The performances declined severely as a result of two main events, retail
malls closures and the partial curfew. Retail Malls, parks, restaurants
dine in, Friday market, and Ice cream trucks were shut down on the 4th
of March. The curfew on the other hand started on the 22nd of March. The
curfew restricted movement of all residents except essential workers
from 5 PM to 4 AM which then was extended several times to 4 PM To 8 AM
until the 28th of May. The curfew also includes government offices
shutdown. The Kuwaiti government announced an extension of the curfew
measures until the 28th of May to avoid viral outbreaks as a result of
Ramadan social gatherings and events. The curfew extension would result
in extending the government offices shutdown and a large portion of the
private sector. Additionally, retail malls, health clubs, salons, and
other major consumer related industries remained closed until the end of
The State of the Fashion Industry
April 2020 Update
Ramadan is known for as a month of mixed performance attributes where the
fashion industry is developing momentum in preparation for two major
shopping events, Gargee'an (mid of Ramadan) and Eid. Those events will
have low positive impact as a result of the lockdown. The fashion
industry failed to react to the crisis as quickly as possible. The major
fashion retailers in Kuwait who are also mall developers primarily
focused on strategies that will only drive footfall into their physical
malls and their stores are byproduct of such strategy. Such focus on
physical stores led to very minimal online presence such as online
stores and social media coverage. Some brands launched their online
stores during midApril, although they do not have the actual online
stores only PDF catalogues that consumers need to communicate their
orders by screenshotting the selected product to a designated WhatsApp
retailers who operated their online stores prior to the pandemic were
also overwhelmed with the increasing orders and the limited timeframe
for delivery. Kuwait is the only country in the GCC that did not allow
the delivery services to operate during curfew hours in March and April.
Such restrictions caused ordered to be delivered two to three weeks
from the purchase date.
WHAT IS NEXT?
Fashion brands are expected to have inventory issues due to unsold March,
April, and May inventories along with order cancellations for the next
two to three seasons. Global brands that control their supply chain and
can balance between the changes in consumer preferences with the severe
financial impact of the virus on each global region will be able to
thrive beyond the pandemic.
Fashion brand retailers must push their localized strategies over their global
brand owners in order to survive and accommodate their local needs. Once
the crisis is over, global brand owners will push their survival
strategies over the country level operators in terms of pushing
inventory and promotions that are beneficial to their global brand owner
but not necessarily matching the localized consumer reaction and
appetite during post pandemic times.
Fashion brand retailers must push their localized strategies over their global brand owners in order to survive and accommodate their local needs.
The State of the Foodservice Industry
April 2020 Update
The foodservice industry kept on generating minimum revenues throughout the
pandemic. Consumers are still able to purchase meals as take outs from
restaurants located outside malls and through delivery service. However,
Delivery was allowed only during morning time due to curfew timings
throughout the months of March and April. The continuous shortening of
the operating hours was putting pressure on deliveries and their
abilities to accommodate as many orders as possible. For example,
breakfast restaurants were not able to accommodate orders once the
government pushed the curfew to end at 6 AM in the morning. Limited
transport due to public transportation and taxis ban were forcing
restaurant staffs to arrive late in the morning and forcing them to
leave their restaurants early at 3 PM to avoid delays and penalties.
Restaurants launched frozen and ready to cook gathering boxes for
customers to cover for the missed dinner meals. However, the meals were
overpriced covering a minimum average of 6 people.
The ban on delivery was lifted in the start of the Ramadan and will operate
during curfew hours which will not generate the desired demand.
Ramadan’s breakfast meals evolve around family gathering with homemade
meals which caused the performances of dine in and delivery to decline
during the holy month. Lifting the ban will not meet the desired
positive impact on the foodservice delivery in May. Additionally, take
out and drive through sales will decline by 100% in the entire month of
May due to the curfew and Ramadan.
Two food retail categories were outperforming other categories due to the
nature of their product offerings such as butcher shops and nuts and
roastery outlets (i.e. International Mill, Al Rifai, Al Fouz, etc.) and
the bakeries (i.e. Mr. Baker, Sable, La Baguette). Both categories
specialize in products that do not require immediate consumption.
Restaurants that featured a strong food retail section like Eataly were
able to remain open in UAE and Saudi wherein they capitalize on
providing branded grocery needs with their own recipes within their
stores and through delivery (Kuwait).
Restaurant brands that diversified their presence beyond retail malls along with
the launching of drive through outlets were able to generate better
performances than their competitors. Despite the long curfew hours,
consumers were slowly getting back to fast food drive through queues
around the country.
WHAT IS NEXT?
Kuwait’s foodservice industry is expected to witness a change in the dine in vs.
delivery revenue distribution. It is true that consumers were forced to
cook at home especially with very limited food delivery timeframe due
to during curfew ban. Two factors will contribute to this change; First,
it is expected that the government to lower restaurant occupancy at any
given time which would reduce dine in transactions due to restrictions.
Additionally, the influx of locals repatriated from overseas and being
locked down is expected to continue throughout May which would create
demand with high purchase power limited only to take out and delivery
A foodservice rebound is imminent, and operators should consider and adapt
to the drastic changes. The increased local population along with the
decrease in expat population is an opportunity that foodservice brands
that profiled their consumers throughout the years can capitalize on.
New tailored menu items with updated prices and smart meal bundling is
of essence. Restaurants should believe in the science of meal building
beyond taste. The sooner a restaurant brand can develop a meal that is
tasty yet have reasonably priced ingredients and change that meal
automatically if the prices change will have the ability to withstand
future market changes.
Additionally,the pandemic will leave the market with more store vacancies and less
competition. The brands that operated a healthy business model should
take advantage of the soon to be available real estate and capture new
market share that was difficult to capture previously.
A foodservice rebound is imminent, and operators should consider and adapt to the drastic changes
The State of the Entertainment Industry
April 2020 Update
Family Entertainment Centers (FECs) business model caters the large number of
children in one place to play together which defies all social
distancing guidelines imposed by the World Health Organization and the
local government. FECs also generate revenues from events and party
rooms. FECs were first to adhere to the pandemic restrictions and many
have closed prior to the local business shutdowns. FECs should adapt to
the changes by reducing the number of children and individuals present
at their playground at any given time. The key element to overcome the
lower occupancies at playgrounds is a booking system. FECs should take
advantage of the summer holiday and children being confined at homes for
a long time. A booking system will enable FECs operators to accommodate
future bookings and guarantee not returning children due to
on the other hand, started managing bookings and reservations many
years ago but have to consider lower occupancy of customers along with
expensive sanitization measures. Cinemas should work together to enable
extended viewing times that are not conventional at normal market
conditions. For example, having movies ending at 2 AM or 3 AM. The lower
occupancies can be countered with extended viewing hours.
Unfortunately, standalone cinemas were replaced by retail malls and the
standalone theater disappeared more than twenty years ago. Real estate
developers should consider the long-lasting impact of the Corona virus
and brace for an independent screening policy from the malls which can
only be done if the theaters are developed as standalones or have
separate points of entry.
Cinemas should work together to enable extended viewing times that are not conventional at normal market conditions.
The State of the Retail Mall Industry
Thoughts and Ideas
The financial impact of the Corona virus on Mall developers is drastic.
Developers started to waive and reduce rents during business inactivity,
and they should expect higher vacancy rates due to closures. The
financial impact would leave those developers at a weak financial
position even after lockdown measures are lifted. Mall owners should
manage the social distancing measures and become proactive to propose
plans and strategies to the government to reopen their properties. There
are two main challenges being faced by the retail malls after the
measures are lifted. The first is how to manage the large influx of
customers who are expected to swarm into the malls and most likely
violate the social distancing guidelines. The second is how to generate
the most footfall for their tenants to stay solvent and cancontinue to
pay the rent.
Retail malls should think to operate their malls at extended working hours
beyond the traditional 10 am to 10 pm. Malls must consider opening as
early as 7 am until 2 am. The longer the working hours, the more
footfall will be expected given the imposed social distancing measures.
Additionally, the malls can develop a booking mechanism for customers to
reserve their visit slot to the mall. The last thing a customer will be
stuck in traffic at the fifth ring road to visit the Avenues Mall or
the sixth ring road to visit 360 Mall. Introducing a booking system
while managing the traffic at the points of entry from the highways
would create an enjoyable shopping experience and convince the
government to slowly loosen up their social distancing measures. The
booking system can also help in controlling retail queues and restaurant
waiting times in the mall.
Moreover, mall owners should work together with the government to expand the
restaurants’ outdoor seating capacity temporarily. This way, restaurants
can accommodate more customers while following the social distancing
measures imposed by the mall and the government.
Retail malls should consider the fact that a second or a third wave of the
Corona virus (or any other novel virus) is likely to happen and plan to
counter the possibility of sudden closures. Retail malls should consider
launching their online retail stores featuring the products of the
stores they house within their malls while integrating shipments and
logistics to be launched from the mall. The Corona virus pandemic
enabled us to witness large fashion and foodservice brand operators
failing to manage their own online presence. Managing a successful
shopping experience relies on the future of the shopping centers
regardless of the venue being physical or virtual. Moreover, retailers
should embrace a major demographics change that took place prior to the
Corona virus crisis. Young Kuwaiti families are moving out from the city
to the new residential areas which changes the frequency of those
consumers to city shopping destinations are bound to decline due to
proximity. Developing a multi-brand online shopping destination would be
a unique selling proposition over the competing malls.
The longer the working hours, the more footfall will be expected given the imposed social distancing measures
GCC Corona Infection Statistics
Despite the drastic measures being implemented by the governments in the
GCC at an early stage of the infection levels in the region, the daily
confirmed cases and the death count has been increasing across all six
GCC countries. Currently, the infection started to increase
significantly since the time where low skilled labor camps and
low-income neighborhoods registered their first cases. The high number
of residents within small and confined spaces were causing the
infections to spread at a fast pace. The business and consumer ability
for consumption declines significantly with higher lockdown measures as a
result of higher infection rates. Kuwait and Saudi Arabia are
maintaining a comprehensive daily infection update of localized
infection count with demographic and geographic details while the other
countries maintained a total count of infections, recoveries, and death
Cases by Country
Deaths by Country
Recoveries by Country
Government Stimulus Packages
Urgent Healthcare Support
Stimulus Packages Value (USD) and % of Counry GDP
The GCC region has its unique financial situation that differs from the global situation. Despite the major oil
price fallout, governments in the GCC have been at the forefronts of supporting the cashflow stability of its
government workers who account for most of the workforce in the GCC countries. Such continuous cashflow
stability along with a spike of that consumer segment will create strong rebound in the market once businesses
are back to operation.