Dubai's effort to secure its economic supremacy ahead of its depleted oil reserves shows no signs of subsiding. With a strategy founded on securing the hard earned dollars of the foreign punter, be that property investor, tourist or expatriate resident, the stage is being set to create an environment impossible to resist. This is perhaps most visible in the retail sector, the second largest growth sector (after real estate) which last year alone saw the entry of an additional 630,000m2 in retail space.

A five-year forecast indicates that there will be an additional 13.3 million m2 (GLA) of retail space available in the Middle East and 30 per cent of this will be hosted by Dubai Malls. Dubai is already home to the "world's seventh largest mall", unsurprisingly named Mall of the Emirates. Nonetheless, true to its "we are second to none attitude" Dubai the City is gearing up for the launch of "the World largest Mall: Mall of Arabia" due to open phase one in 2008 featuring 1,000 retail outlets and 120 food outlets.

Mall developers acutely conscious that size alone is not enough and are all on the search for a 'point of difference'. The onus is on the developer to create the 'wow formula'. These 'Mega Malls' are no longer a place just to shop but a place to be entertained. The assortment of leisure and entertainment options is an increasingly important factor in the 'wow formula'. Dubai's solutions range from the inspired to the surreal, including IMAX cinemas, an 800m real snow ski slope and a dinosaur theme park.

With an official resident population of 1.2 million, one is obligated to ask: "how will the numbers stack up?" According to Retail International, Dubai's retailers alone have to generate US$8 billion in sales by 2009 to sustain the massive increase in shopping centre space and retail activities. Ultimately, bottom line success will be largely dependant on the tourism dollar.

Dubai has earned a reputation for being a primary retail therapy destination spurred on by the Dubai Shopping Festival (DSF), an event which has grown 10-fold from its launch in 1995 . The DSF played a leading role in Dubai's retail tourism sector attracting almost 50 per cent of the 6.2 million visitors welcomed in 2005. This government-led initiative has enormous marketing budgets at its disposal and its reach has spanned the Middle East, Asia, and Europe. Dubai has become increasingly attractive to Arab families hesitant to venture abroad in the aftermath of the 9/11 tragedy and visitor numbers from Middle East countries have continued to rise year-on-year. The DSF is also favourite with in-bound tourists from India, Pakistan, Iran and Russia, all looking to bag a bargain.

Although the country still enjoys one of the world's highest income per capita statistics, bargain hunting has become a national pastime. Drawn from a global base, the shopper here is well travelled and 'deal savvy'. Value for money figures high in the purchasing decision cycle. The Al Ahli Group, innovators of 'Dubai Outlet Mall' - the first of its kind in the region, has geared a mall "to meet the demands of the budget buyer, who account for the largest segment of all retail spending in the region." The Mall, featuring multiple retail categories all offering premium discounts, is due to open later this year.

While the race is on to complete an additional 50,000 hotel rooms needed to meet the forecasted demand, Dubai continues to eye new markets for its tourism offer and has its eyes set East. Among its targets are the Japanese (tried and tested retail addicts) and the Chinese (outbound tourism figures expected to rise to 100 million per year by 2020). Whatever the origin of the retail tourist, Dubai based retailers will see a shift in spending patterns and must scrutinise their positioning accordingly. The tourism dollar currently accounts for 35 per cent of retail sales in Dubai's top centres and this figure is expected to rise to 50 per cent by 2010.

Tourism aside, the spending power and brand loyalty of the resident population will continue to be the barometer for retail success in the City. Dubai Inc. (as it is known among the denizens) has exerted every effort to lure a qualified and well-heeled resident expatriate. The power of human capital is well recognised and those entrusted with securing the City's long-term economic stability are all too aware that the resident expatriate will have a significant role to play in delivering the Dubai 'experience'. Moreover, these 'Expats' will further support economic stability if they are compelled to spin their hard earned bucks back into the local economy.

With over 120 nationalities resident here the Dubai population has been coined a 'window to the world'. Recent years have seen some significant shifts in the composition of the expatriate population with a steady rise in the numbers from South Africa, Eastern Europe and Australasia. The population of Dubai is expected to double by 2012 and the Brits are seemingly here to stay.

The relationship between the United Arab Emirates and Britain has long been one of mutual benefit and the British community in Dubai is well established. According to the British Consulate, there are currently around 120,000 British Citizens resident in the UAE and over 1 million visit the country annually. Not surprising then that British brands have long featured in the City's retail mix. In fact, the arrival of British staples such as Next and Body Shop as far back as the 1990s marked the beginning of organised retail here.

Al shaya Group, one of the region's retail giants has guardianship of a host of British brands including Debenhams. Their most recent conquest being high street favourite, Boots. Confident that the Boots mix of healthcare products, toiletries, and cosmetics will appeal to Dubai's diverse population, rather than just the tourist and UK expatriate consumer, Mohammad Alshaya, Chief Executive of M.H. Alshaya, suggests the concept offers a new dimension to the market: "Nothing like the Boots brand currently exists in the Middle East."

Marks and Spencer has two stores in Dubai with a third on the way and December 2005 saw the arrival of another great British institution: Harvey Nichols. British fashion is well anchored here with a mêlÉe comprising of renowned brand names such as Top Shop, River Island, Karen Millen, Jigsaw and most recently Reiss, which chose Dubai as the launch City for its international franchise.

It does not stop with fashion. Mothercare and Early Learning Centre will soon be joined by the iconic Hamleys to complete the kids offering. British brands remain high on the target list for many of our premier retail investors. They have a proven acceptability here and are thought of as being reliable, consistent and quality driven. Moreover, British franchisors and or principals are perceived as being well-structured, organised and supportive.

So, the question of acceptability of British brands is clear, what remains to be seen is how British brands will shape up when compared to their international competitive set. With potentially over 7,000 retail outlets to choose from the Dubai consumer will become increasingly discerning and demanding. To make the most of a market like Dubai flexibility will be key. Retailers will have to look carefully at evolving multiple store formats to account for the segmentation between the resident and tourist dollar and where and how it is spent. They will also have to take a close look at product mix and value proposition as compared not to its UK competitive set but to the international contenders.

For British retailers with the right 'attitude' Dubai offers a lucrative addition to their international expansion strategy - a unique testing ground against a diverse cultural and social mix, and a gateway to the Middle East, sub-continental and African markets with their combined population of 1.4 billion people and a staggering combined GDP of US$1.9 trillion.

One thing we can be sure of is that the Dubai potential is being assessed by all retail leaders world-wide so now is not the time for British Brands to procrastinate.

Tracey Furey is Managing Director of Franchise Development Services Dubai and a specialist in franchise based strategic marketing, brand building and business development activities. She has participated in a number of forums and contributed to the region's foremost business publications. She is a member of the Middle East Council of Shopping Centres and the International Business Women's Group. FDS Dubai provides services to inbound franchises including market research and market entry planning, franchisee profiling and recruitment, and pre-opening project management. Call Tacey: + 971 4 3408033