Mideast shopping spree

(CNN) -- Nestled in a corridor of Emirates Mall in Dubai sits Hassam Goldooz's boutique. The retailer sells Italian ladies fashion to women of the Gulf, and those in for a visit.

To hear Goldooz tell it, business couldn't be better.

"Dubai is booming and we are having lots of new shopping malls, lots of new tourists. And I can say we have an almost 50 percent increase every year," he says.

Goldooz's bump in business isn't isolated. The exploding growth in the Middle East is translating into a goldmine for the retail industry.

The sector is now worth more than $100 billion dollars a year, second only to residential property in non-oil related businesses.

"Because of the high price of oil, we've seen very strong economic growth ... and investment in retailing there," says Ira Kalish, Consumer Business Director for Deloitte Research.

Dubai leads the way for the region's retail investment, with a turbo-charged tourism industry fueling the growth.

The emirate's tourist arrivals grew to more than five million in the first three quarters of 2007.

That's almost five times the size of Dubai's permanent population.

And the amount of retail space is keeping pace. Billed as "the world's largest mall," the Dubai Mall is a 12-million square foot behemoth set to open at the end of 2008.

Across the region, the amount of retail space is expected nearly to double in the upcoming years.

"As the economy improves, and as the spending power and the GDP of countries grows from year to year, we are going to see more shopping malls in the region. We are seeing it hand in hand with the growing infrastructure in the region," says Majid Al Ghurair, Chairman of the Middle East Council of Shopping Centers.

The region's economy isn't without risks. Surging inflation is putting pressure on prices throughout the Gulf.

But analysts say that while inflation may be hazardous to many sectors, it isn't necessarily a bad thing for retail.

"Inflation is a risk, and whenever there is inflation, that does have an impact on retailing," says Ira Kalish of Deloitte Research.

"Generally speaking, retailing benefits from inflation, because when there is inflation, people are less price sensitive."

Back at his boutique, Hassam Goldooz says he hasn't felt the effects of inflation. With every shopping bag he fills, Goldooz sees growth -- and opportunity.

"We are definitely sure we have lots of space for the future market," he says.

"Tourists are coming and they are discovering this area. I think this area will have a great future in the next decade." E-mail to a friend