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UAE grocery segment gets competitive

The UAE's grocery and supermarket segment is set to undergo major changes in the coming years as more and more big players are coming into the market, which will, though, bring more benefits to the consumers but will also bring bigger challenges and competition for the smaller players.
Though smaller grocery stores owned and operated by small investors continue to dominate the local market, but bigger players such as Safeer, Carrefour, Al Maya Group, Choithram and others are strengthening their presence through supermarkets at an aggressive pace as the bigger shopping mall need high investments. Of late, fuel retailer Enoc has also been expanding its Zoom brand to outside the petrol station as an independent stores.
On Wednesday, Dubai-based retail giant Landmark Group, owned by billionaire Micky Jagtiani, forayed into grocery market by opening four outlets and planning to open another 10 in the UAE. Renuka Jagtiani, Chairwoman and CEO, Landmark Group, said of 1,200 products sold at its Viva grocery outlets, around 80 per cent of them are sourced from Europe and directly from the manufacturers, hence, the prices are cheaper by up to 50 per cent.
She claimed that a medium income family can save one month salary in a year due to their low prices as compared to other rivals.
Commenting on the competition, Dhananjay Datar, chairman and managing director, Al Adil Group, said competition is good because it not only gears rivals to enhance their offerings, but also benefits consumers in multiple ways. "Competition will provide consumers with choice. More than drop in prices, consumers will get opportunities in the form of offers and deals. As far as we are concerned we are already providing our customers with the best products at the most affordable prices. Our prices are highly competitive and we will not be dropping our prices on account of competition. If we start doing so, there will be no end to this," Datar said.
As far as the impact of competition on margin is concerned, he said, "It ultimately boils down to the economy of scale and here we have a distinct advantage since we have our own manufacturing sources," Al Adil chairman said.
Alpen Capital earlier said in a report that consumers find it hassle-free to shop at supermarket and hypermarket as they are organized establishments and offer a wide range of products at competitive prices in a convenient set-up.
Georg J. Fischer, CEO, VIVA, said the prices are at least 30 per cent cheaper as compared to prices of the similar products available in other supermarkets in the town.
"We have discounter which means that we source our products directly from manufacturer to remain competitive in terms of prices whether going up or down," he said, adding that in order to offer competitive rates it is more to do with the supply chain.
"You can't start with one store; you have to have a concept. Most of the suppliers can't just produce one case. They have to produce certain volumes and also want to work with a company which is giving them a concept on a long term version."
The company, according to Fischer, will focus on high population density areas with focus on walk-in customers as well. - waheedabbas@khaleejtimes.com