Counting on correct change

As the downturn in sales among small retailers purportedly verges towards crisis point, some of the UAE's distinguished groups have unveiled store innovations that could inspire them and transform this state of affairs.

Despite the unquestionable ability of hypermarket giants to use their vast cash reserves to overshadow independents in Saudi Arabia and the UAE, homegrown retailers are now moving into smaller, more specialised formats for 2008.

Spinneys CEO Jannie Holtzhausen has pinned down the potential of its Market stores in ‘capsule' formats for residential areas, and plans to debut the concept beyond the region at China's International City and the ‘food anchor' at the Dubai Mall, Ajman Mall and Marina Mall while taking its number of stores to 50 by the end of this year.

First launched in 2005 and featuring in-house bakers, butchers and chefs preparing gourmet cuisine in a boutique setting, it appears on initial consideration to be a brave move amid the current uproar from small players.

However, Retail News has discovered that size is most definitely not everything for UAE heavyweights in their growth strategies. It is not just Spinneys chasing the gap in the market for foodie paradises led by all-embracing bakers, butchers, delicatessens and salad bars.

Emke Group has been filled with confidence after the triumphant launch of its Lulu Express concept in Abu Dhabi. The company will open 15 to 20 outlets in the new convenience format by 2010, and is gearing up for openings in Saudi Arabia, India and Egypt.

Amid all the change, the comment that struck me most came from Aadham Junaidallah, CIO and executive vice president for support for Othaim Markets: "In order to compete, small retailers need to specialise in a niche segment to increase their chances to continue and grow."

This approach certainly isn't doing the big boys any harm. Distributors and real estate companies are favouring deals with international names, according to many FMCG professional, so small businesses should grab the opportunity to hit the right note with shoppers through solid points of differentiation and exciting formats.

The amazing response of UAE-based groups alone to ever-shifting consumer trends and the multiple challenges facing minute and gigantic players alike indicate the industry is on the brink of an incredible journey for 2008. Meanwhile, Retail News will report on every twist and turn.

Do you feel your company set a high standard for others to pursue last year? As an FMCG professional, you should be casting your votes for the prestigious Retail News Middle East Awards 2008.

www.itp.net/events/retailnewsawards

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