As industry professionals warn of the current skills dearth, the operator of Panda, Saudi Arabia’s biggest supermarket chain, has demonstrated meticulous forward planning.
Set to double its network of supermarkets and hypermarkets by 2010, the group is currently battling serious competition in Saudi Arabia’s retail arena – in which it has gathered an impressive 28 years experience – before taking the concept globally.
We have tried to change the whole scene as part of our social responsibility, and have 3000 locals working at Panda in Saudi Arabia, yet in three years we will have 10,000.
“We have very ambitious plans to expand, but we want to pay attention to Saudi Arabia first. This year we are growing our business by SR1bn (US $267 million) in sales, and to capture more customers we have to open more stores and have a bigger selling area,” said Dr Muhammad Amin Kashgari, sector CEO for Retail, Real Estate & Packaging Divisions at The Savola Group.
“We want to be in every corner, so we’re going into the medium and small cities in a bid to capture untapped business, and have already opened three hypermarkets in Medina, Abha and Mecca this year, and next year we will open four or five.”
Despite the company’s sweeping presence and focus on local recruitment, staff retention has emerged as the greatest challenge to its future developments.
“Recruiting locals is not difficult as there are no so many young people looking for jobs, but it is difficult to keep them in roles in the service industry,” he said.
“The work is demanding and people have to stand on their feet and smile for many hours, so some of them are not patient enough and leave after a few months,” he added.
In response to the present shortage of skilled labour coupled with a surfeit of job vacancies ahead, Dr Kashgari told Retail News the Savola Group plans to launch a Retail Academy to lure candidates.
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The Academy, to be funded by the government, will “allow young people to study for a longer period of time with a guaranteed job on completion.” Dr Kashgari reveals that “thousands of people” will be trained at the site, tipped for Jeddah or Riyadh.
“We believe the younger men in Saudi Arabia need training for longer periods of time, as a month of guidance is no longer enough for a cashier.”
Scheduled to open in six months, the Savola Group will provide trainers and equipment for the state-of-the-art facility, and Dr Kashgari views the move as “part of our social responsibility.”
“We have tried to change the whole scene, and have 3000 Saudis working at Panda, yet in three years there will be 10,000. so to attract 7000 we would need to recruit 20,000 and hope that some will remain,” he said.
Accreditation will be awarded by the Academy to successful graduates, which Dr Kashgari said will make them “more valuable and employable.”
Job openings will undoubtedly be available as Savola Group moves forward, and international expansion of the chain has not been ruled out.
“Savola has a good knowledge of the Middle East and North Africa markets, and as we have been in Egypt with our edible oils for 12 years, that country’s underdeveloped retail market would be a target.
“When we establish ourselves as the real number one in Saudi Arabia, we will go into neighbouring markets, as although we were initially planning to have five stores in Dubai we decided that payback is better in Saudi Arabia and have put them on hold.
“A very strong supply chain is required to have 130 stores, for example we have invested SR300 million ($80 million) in a modern, fully-automated warehousing and distribution centre, and our competitors don’t have that so in three years we will be even further ahead than them.”
In a bid to reach the “four corners”, Savola Group will capitalise on its logistical breakthroughs, and the possibility of moving into new retail formats is under review.
“Panda is well known in Saudi Arabia but we want to extend to extend our status to the Middle East, North Africa and central Asia, by provoking interest in retail, which is not easy,” he added.
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