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Sun 13 May 2007 03:14 PM

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Al Sadhan enters private label market

KSA hypermarket group plans to compete with multinational brands by expanding its private label products.

Al Sadhan, one of Saudi Arabia's leading supermarket groups, is expanding its private grocery brands in a bid to increase its reach beyond retail.

Riyadh-based Al Sadhan intends its private label products, which include cooking oil under the Baraka label, and cleaning products under the Lily banner, to compete with mainstream mid to higher-end products, rather than with low cost items. It also hopes to expand its range and make the products available outside its own stores and across the Middle East, Maher Assaf, Al Sadhan's private label manager, told
Retail News Middle East


"More than 25 items are now available, and other items will be added by next month," Assaf said. "This project was set up only six months ago to meet a growing need in the Saudi market for good quality grocery products at correspondingly good prices, it started with the idea to create a complete line of products for customers that are not only price conscious but also looking to satisfy their needs for high quality products.

"It was never about competing with the leading brand names already sold at Al Sadhan; instead, our goal in creating these brands was to provide Al Sadhan customers with a wide variety of guaranteed quality items at affordable costs."

He added that the lower cost of Al Sadhan's brands is likely to help the company achieve its sales targets for its private label goods. "There is no big mark up involved once the product reaches our outlets," Assaf said.

"Lily bleach can cost up to half the price of other leading brands. The added bonus of buying store brand products is the great quality of customer service that comes with it. If any customer happens to be dissatisfied, the problem is resolved immediately. Both labels are currently in such high demand that the manufacturers are always in production. Baraka oil and Lily tissue are perfect examples of this since they currently sustain the highest sales within their product range."

Al Sadhan hopes that its own label products will eventually account for 20% of sales from its stores. He added that the products have an advantage over those produced by rival companies, which have to pay listing fees in order to be stocked in the supermarkets.

Al Sadhan's push into private label production goes beyond food items. The company is also behind Bonito clothing and footwear for men, women, and children. It also produces Force Tech, a brand of electronic appliances, and Avenue, a range of home centre goods.

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