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Mon 25 Feb 2008 10:46 AM

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No more cutting corners

The announcement of the UAE's Aswaaq development has highlighted the significance of supermarkets benefiting nationals.

In Dubai, a city where the consumer looking for somewhere to shop can make no complaints about shortage of choice, an announcement was made earlier this month to open the largest chain of community centres and supermarkets in the UAE.

But what would set this ambitious project apart from existing operators? Aswaaq is a public joint-stock company (under formation), and its executive committee has already been formed. Aswaaq and the Dubai Government have entered this venture together with the latter owning 45%.

In return, the Dubai Government allocates the land to Aswaaq and the remaining will be listed as an IPO. The acquisitions of its shares are reserved solely for UAE nationals.

The involvement of UAE nationals as suppliers and investors will be actively encouraged, and the project's focus on "using the best international practices to decrease the operating costs of the project" in a bid to "provide the products and services to the customers with reasonable and fair prices" will certainly spell a turnaround for the country's grocery market.

Essentially, aswaaq will provide a new concept in the convenience shopping sector, with "friendly and enticingly vibrant" supermarkets led by "socially dedicated management" tucked within community centres in a plethora of sizes.

The first aswaaq community and supermarket centre will open in Dubai, it has been revealed, and the committee is set to hold its first meeting to adopt the statute, strategy and objectives.

According to its launch release, aswaaq will provide a homely shopping experience bearing in mind foodservice and quality. The supermarkets are categorised into four sizes, ranging from 14,50ft² to 44,500ft² depending on its location.

As retail industry professionals brace themselves for further details to trickle out on the enormous development concentrating on local recruitment, a feat much sought after in recent years, we are reminded of the charm of the corner shop or the convivial supermarket.

Last week's announcement by the UK's Competition Commission accentuated the need for balance and fair competition in the retail sector. The country's supermarket industry has been paved over by competition regulators, with five separate inquiries in the past five years.

The latest inquiry, conducted by the Competition Commission, focuses on whether the grocery market is working effectively for shoppers in regard to competition between shops in local areas.

The Commission has now proposed a ‘competition test' for new stores of 1000m² or more ‘one stop stores.' The test would be to avoid any operator becoming overwhelmingly powerful in a given area, a step that would definitely instil fear in many a hypermarket operator if implemented here.

Supermarkets strive to create soothing, consumer oases abundant with niche offerings, however travelling long distances in the UAE before being faced with dizzying, endless aisles and queues can create the opposite effect for shoppers.

Although hypermarkets are cashing in on the demand, particularly among lower socio-economic groups, to bulk-buy cheap food backed by offers and clever advertising, aswaaq could signal the steady rise of the small-format, convenience and independent ‘corner shop' in the country.

Aswaaq has spelled out ambitious plans to invest in the skills of UAE nationals and its community-led concept will surely add flavour and much-needed ‘corner shop' appeal to the existing mix.

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