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Thu 1 Mar 2007 12:13 PM

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Al Sadhan enters hypermarket sector in bid for KSA expansion

Saudi Arabian retailer plans to open 20 hypermarkets in its home market by 2009, and looks to Syrian and Lebanese markets for expansion.

Al Sadhan Trading Company, one of Saudi Arabia's leading supermarket groups, has revealed details of an ambitious expansion plan after opening its fifth hypermarket, a flagship 21,000 sq m store, in Riyadh.

Al Sadhan, which has six more stores under construction, is planning to open one or two stores every quarter with the aim of having 20 hypermarkets in Saudi Arabia in the next three years, Mazen Al-Saleh, Al Sadhan's CEO told Retail News Middle East.

"By Ramadan there will be three new hypermarkets, each of them will be between 11,000 sq m and 15,000 sq m," Al-Saleh said.

"Currently we have over US $200 million worth of construction work in progress, which we are doing ourselves because we are 100% self owned."

If Al Sadhan meets in targets, it will become a significant rival to Saudi Arabia's biggest supermarket operators, including the number-one player Savola Group, which has about 50 supermarkets and five hypermarkets in the country and aims to open a further 20 hypermarkets in a bid to become the biggest retailer in the MENA region by 2010.

Al Sadhan also plans to expand beyond its home country, most likely into Syria and Lebanon, according to Al-Saleh. "In 2009 we are looking to different countries, but not in the Gulf. We're looking at countries like Syria and Lebanon," he said. "When you're in Saudi Arabia you get spoiled because the country is so big - there are five million people living in Ryiadh alone. You don't get that in countries like Bahrain or Qatar, so we need to get into countries that have big populations."

Furthermore, Al-Saleh is convinced that Al Sadhan will be able to compete effectively with retailers such as Panda and Al Othaim, not least because of the scale and specifications of its hypermarkets. Indeed, Al Sadhan's newest hypermarket in Riyadh took about two years to develop, covers an area of 21,000 sq m, has parking space for more than 700 cars, and employs 430 people, making it one of the biggest outlets in the city.

"The new hypermarket features a large grocery department with a new bakery, delicatessen, hot food, meat, dairy, sea food, juice corner and fresh produce sections, and a frozen foods section," he said. "It also offers customers a large home centre department, and a big garment and shoes section for ladies, men, and children and an expanded electronics department."

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