INTERNATIONAL. The Middle East hypermarket is finally coming of age reports Retail International - the specialist Middle East retail consultancy based in the UK. Starting with a single Carrefour (formerly Continent) in Dubai in 1995 the format is now being rolled out across the entire region stretching from Egypt in the North through Saudi Arabia to Oman in the extreme South.
Whereas MAF Investments, the regional partner of Carrefour were more or less unchallenged as hypermarket operators only a few years back serious competition is now beginning to be offered by the likes of Casino's Géant, Savola Group's Panda and Spinneys.
Anchoring MAF Investments' hugely successful 130,000 square metres Deira City Centre, Dubai, the original Carrefour in the region is the benchmark against which all others so far measure performance and 17,000 square metre size.
Recent announcements not only by MAF Investments, but also by the other key players mentioned, of new and larger projects may mean that the original Carrefour's position may soon be challenged.
A day barely passes without an announcement of yet another mega project and the announcement by MAF Investments in October 2003 that their latest project, the already massive Al Nakheel Mall, would henceforth be known as Mall of the Emirates and be doubled in size - anticipated to be in the region of 400,000 square metres - to become the largest shopping mall outside North America. Anchored of course by the largest Carrefour so far planned in the region.
This follows hard on the heels of it being revealed that Géant will anchor the 300,000 square meters Gardens Shopping Mall situated on Sheikh Zayed Road between interchanges 5 and 6. This will be the second Géant in the Gulf, the first opening in Bahrain in 2001, and trounces any concept of these two French brands not setting foot in the other's territory. This second store will cover 16,800 square metres of floor space including service areas.
Géant's local partner, Retail Arabia are reported to be investing US$20 million in the project and plan to carry more than 65,000 products ranging from groceries to textiles, fashion wear, electronics and household and other items.
The launch pad in the region of Géant, anchoring Bahrain Mall completed in May 2001 and the only real hypermarket in Bahrain will be joined by Carrefour if MAF Investments plans to start construction of The Mall of Bahrain in 2004 are fulfilled. Located in the Seef district of the capital Manama, this new mall will add to the other leading malls located here. These include Seef Mall, Bahrain Mall, Al A'Ali and Al Dana - the latter anchored by Giant - a Saudi hypermarket group not to be confused with the similar sounding but quite different Géant.
What this burgeoning concentration of retailing and already congested access roads will do for Seef remains to be seen.
Saudi conglomerate and food producer The Savola Group are busy developing Panda a hitherto supermarket brand into a national hypermarket chain with their first hypermarket in Riyadh anchoring their own shopping mall, Azizia Mall.
Strategically located between King Fahad Road and Olaya Main Road, the mall will encompass 32,000 square metres of leasable area and is due for completion in 2004. Panda Hypermarket will occupy 16,700 square metres of trading floor space.
To the North of the city, The General Organisation for Social Insurance (GOSI) are developing Granada Center a destination mall of some 200,000 square metres fronting The Eastern Highway and Al Imama Abdallah Road to be anchored by the Kingdom's first Carrefour of some 12,500 sq metres.
MAF Investments successful Carrefour anchored mall concept is being rolled out in Egypt by joint venture MAF Misr and to date includes Alexandria City Centre, Alexandria and Maadi City Centre, Southern Cairo.
Elsewhere Monoprix are earmarked to anchor Dandy Mega Mall on the Alexandria Desert Road, Cairo with a 14,000 square metre hypermarket being developed in phases to eventually offer some 70,000 square metres of leasable space over the coming months.
Casino's third Géant in the Middle East, but possibly the second to open, is well under construction at Dora, in the northern suburbs of Beirut. Anchoring Admic's Dora Regional Commercial Centre the hypermarket will offer 11,000 square metres of floor space out of a total gross leasable area of 60,000 square metres. Not far away along the Jounieh coast road, MAF Investments are reported to have acquired a site for their first Carrefour in Lebanon. Rumours persist about a second Carrefour South of the city.
Elsewhere Spinneys - formerly owned by the UK Inchcape Group but now owned by the Cupola Group of Dubai - was an early entry to the Beirut market with now a number of significant stores strategically located around the city including Jounieh Road to the North, Achrafieh to the Southeast of the city centre and the latest, in Jnah Southwest of the city centre.
Across the region
These latest hypermarket developments by the leading players will add to the existing stock that includes Carrefour in Abu Dhabi such as the one pictured (2 in the city) Al Ain (1) Ajman (1), Sharjah (1) UAE; Muscat (1), Oman; and Doha, Qatar (1).
Further expansion by Carrefour is expected in Saudi Arabia, Egypt, and Oman and potentially Kuwait, Jordan, and Syria.
Casino and their local partners can also be expected to carry on the pattern of development that is beginning to emerge for the Géant format with rumours circulating of being linked with various projects in Sharjah.
Other important players include Kuwait based Sultan Center and the India-based Emke Group's LuLu Centre brand. Sultan Center has major trading operations not only in Kuwait but also Oman and is reported to be planning a large cash and carry in the rapidly expanding Seeb district close to the international airport. LuLu Centre opened its first hypermarket in Al Ghoubra, Muscat in 2004 followed by a second some months later.
Tesco although not established in the region has historic trading links with Jawad the respected Bahrain supermarket chain and with Spinneys, with whom it has had a long standing supply agreement for own-brand groceries. The recent acquisition of the Turkish supermarket chain Kipa by Tesco brings its presence ever closer to the Arab world. Whether this is within the current horizon of Tesco Chief Executive, Sir Terry Leahy's "international strategy for long term growth" has yet to be revealed.
What is certain is that the hypermarket offer is now well established in the Middle East with the format being rolled out ever more widely across the region.
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Note: The views expressed in this article are those of Retail International and no liablity can be accepted for any errors of fact or opinion.