There seems to be a renewed interest from many of Planet Retail’s clients in the potential being offered by the Middle Eastern market, and to a lesser extent, the longer-term opportunities presented by Africa.
The wealthy Gulf Region is proving an attractive market for the expansion of international players, either in partnership with or under license to local retailers.
In the United Arab Emirates and Gulf Region the organised grocery sector has grown strongly, with continued high spending, increased wages and the influx of new foods driving sales and expansion for the modern supermarket chains.
The buoyant market in the United Arab Emirates has attracted international players including Waitrose, which now licenses two stores in Dubai together with franchise partner Finefare Food Market (owned by Spinneys). There are plans to grow the Waitrose portfolio in the region, with new stores set to open in Abu Dhabi, Oman and Bahrain. Spinneys will also continue to expand its own large-format supermarkets and neighbourhood stores across the region.
Carrefour is progressing in the region through its joint venture with United Arab Emirates-based Majid Al Futtaim Retail (MAF). Over the past three years the joint venture opened 14 hypermarkets, bringing its total to 37 in the Middle East. MAF is now looking to further profit from growth in the Middle East and north Africa with plans to open new Carrefour stores in countries such as Yemen, Oman, Egypt, Iran, Saudi Arabia, Libya, and Lebanon. MAF will also enter Iraq this year, opening a Carrefour store in September in Erbil, in Iraq’s Kurdistan region. Carrefour is the second foreign hypermarket chain to enter the untapped retail market in the region, after Kuwait-based City Centre. MAF traditionally enters markets with Carrefour as anchor tenant of its malls. In August 2009 it opened a local version of the hypermarket under a different brand name in Iran’s capital Tehran.
In the Middle East the retail scene is thriving and large format retail stores and shopping centres are proving attractive growth vehicles for established players such as Emke, Spinneys and Panda. As the income and spending power of the population increases, the region is likely to attract further investment from both domestic and international players, which will continue to fuel strong growth in the region.
Bryan Roberts, global research director, Planet Retail. For more information contact us on:
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