The queue for faster profits

The push among local retailers to promote the convenience channel has created blueprints for an explosion of new openings.

After months of whining among both retailers and consumers about customer service failures, as if by magic, announcements of new projects have caused a domino effect through the industry.

In commendable efforts to shake-up and advance the format, homegrown retail giants including Jawad Business Group, Emke Group, NTDE and Abela have informed Retail News of their strategies for considerable expansion drives.

Last month the chairman of Ras Al Khaimah-based giant RAK Holding, His Highness Sheikh Tariq Al Qassimi proclaimed that its upcoming Near Buy chain will focus on establishing shops within 500m of almost every home within the UAE and revive the small grocer market by opening up to 500 stores by 2009. The robust strategy will be driven hugely by franchises and dwindling businesses.

Still very much in its infancy in this market, the convenience channel demands cost effective logistics, trained human resources and soaring rent costs. However, when examining the successes of the format in other countries, the strains involved in setting up c-networks definitely are worth it in the long term.

In the UK, SPAR is rumoured to be planning to spend GBP3.7 million (US$7.2 million) on an integrated marketing campaign in its largest ever sales push.

The Sorted campaign will focus on three key groups of c-consumers, an idea worth chasing by retailers here who need to satisfy a high number of nationalities.

The reliance on POS systems in Japan could also prove a successful case study in the UAE, allowing retailers to record customers' ages and genders for example.

RAK Holding's ambitious plans have indicated one main thing: there is no reason to suggest the UAE could well be on a par on the convenience scale with countries such as Singapore.

The 7-Eleven chain kick-started the trend of convenience stores in Singapore when it opened its first store in 1982 by Jardine Matheson Group. Since then the 24-hour opening policy and irregularity of many people's working hours has reached out to a large consumer group and built a mighty channel.

Back in the region, a pattern of convenience development previously ensconced in large cities and large malls will be overturned by the end of this year as retail bosses look increasingly to the residential development booms of the UAE's smaller emirates and the lure of their controllable rental costs.

The region has been crying out for an influx of stores, differentiated by their speed of and familiarity of service.

While major players wake up to the benefits of going small, the convenience boom can only mean good news for us all.

Lynne Nolan is the editor of Retail News Middle East.

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