By Daniel Shane
Retailer plans to introduce online services across region as part of expansion drive
Food retail chain Spinneys will roll out online shopping in territories across the Middle East this year, the company’s CEO told Arabian Business.
The Beirut-based grocer, founded in 1924, will introduce online retail services in Lebanon, Qatar, Jordan and Egypt to complement its expansion in retail outlets, Michael Wright said.
The functionality will allow customers to compile grocery lists via the internet that can then arranged to be delivered to the buyer’s home, or collected in-store later at the shopper’s convenience.
“We’re going to launch it in Lebanon in May, with the intention of rolling it out to all the other countries,” Wright said in an interview in Dubai. “Because we have a lot more resources in Lebanon, we trial everything in Lebanon and then roll it out to the other countries from there. It will be before the end of the year in all the other countries.”
Spinneys, which saw more than 20 percent growth to almost $1bn in revenue last year, also has a major presence in the UAE, although this is operated by a local franchise partner.
Wright said that the way online retail is implemented by Spinneys will be tailored to each country market it has a presence in.
In Qatar, Spinneys will target customers with “more affluence”, he explained, and will deliver items directly from the store to shoppers’ front doors.
“The infrastructure in Qatar is as such that we can easily make large deliveries and have a much shorter delivery time with a fewer number of customers.”
In other markets the firm will target higher volumes of lower value deliveries, but use a system of hubs to shorten delivery times.
“In Egypt, we’ll have to have hub-and-spoke, so we’ll take the product into sub areas [because] you can’t send the truck backwards and forwards in the high traffic,” Wright said.
The Spinneys chief said that the company was still pushing ahead with investments in traditional retail real estate over the coming 12 months.
The company plans to open two new outlets in Qatar and a further two in Lebanon at a total cost of $30m, as well as new stores in Egypt, which will mainly come online in 2015.
Wright said that Spinneys, which does not own its own stores but leases them from local partners, will finance its expansion through cash reserves and bank borrowing.
Wright said that Spinneys success going forward would rely on striking a fine balance between offline and online retail models. “Part of it is the offering inside the shop, it’s the loyalty, how we tailor the promotions to the individual consumer and then deliver it to them when they wish to have it delivered,” he said.
“It dovetails into the whole way we’re changing our business.”