Franchise chief calls for retail regulatory body

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Action plan: Al Shaya suggests retail regulations.

Mohammed Al Shaya, chairman of one of the Gulf's leading retail franchise groups and a leading figure within the region's business community, has called for the urgent formation of a body to oversee the region's retail expansion.

"There is no association of retailers here in the Middle East, while there is huge expansion into shopping centres without any zoning or control," he told Arabian Business.

"We need regulations on the amount of commercial space being built. "Look at Mayfair in London, for example - would Mayfair be converted into a shopping centre? No. We are moving too far too fast," he continued.

"Certain markets still need more space, like Dubai, as there are new people coming all the time. Then it is very wise to add more space," he argued. "But at a certain time the market will be saturated with so many shopping centres - there have to be phases."

Al Shaya was speaking ahead of his presentation to the World Retail Congress in Barcelona last week. As one of the key presenters, he took part in a special session on the ‘reality of franchising across the globe'.

The congress brought together the world's leading retailers to address and debate key issues in the retail industry. With delegates drawn from 40 different countries around the globe, and a prestigious lineup of 125 of the world's retail leaders, it provided the sector with a clear and coherent voice, that it is hoped will be heard by key groups such as politicians and policy makers. "When it comes to volume, the ME is still a small market that benefits from a purchasing power that is huge," he explained to Arabian Business.

"You have the brands that are successful in the US, in Europe and globally, and it makes sense to bring them to market here. Franchising is one tool.

"There are other tools, like joint ventures or direct investment - that is companies coming over and opening themselves - so the brand presence, whether through partnership or franchising or their own, is going to be there because there is demand for these brands," he continued.

"There could be a gap between the perception of franchising and the reality of franchising," added Al Shaya. "There are people who don't want their brand to be operated by other people, and they don't understand the short, medium and long-term benefits from it. They have a lack of perception, or a perception that the Middle East market is problematic.

"We did face hesitation from some brands, but then there are brands that are very excited too," he concluded, adding that the group currently had no plans to announce new franchise agreements, nor was it in negotiations with potential partners.

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