Hypermarkets in Saudi Arabia

PROSPECTS

Development of modern grocery retailers favours outlet growth of hypermarkets

Riyadh, Jeddah, Mecca and Dammam are the key cities in Saudi Arabia with an approximate total population of 15 million, which almost half of the country’s total urban population. With young demographics, hot summers and a general lack of entertainment activities in the country, modern grocery retailers and shopping centre development has rapidly grown.

Hypermarket players keen to strengthen online presence

While all major hypermarkets are improving their existing channels to further strengthen their presence, intensifying competition has led product categories to become almost identical. Therefore, players in hypermarkets are looking for avenues to differentiate themselves from the competition and to gain consumer loyalty.

Female workforce in retail through Saudization to support new product categories

With Saudization policies in retailing providing opportunities to women to join the workforce, hypermarkets in Saudi Arabia can now employ female sales representatives and managers, which gives better category management and assortment for a range of product lines, especially related to beauty and female hygiene. While hypermarkets in the United Arab Emirates offers areas and kiosks for cosmetics, the channel in Saudi Arabia did not feature such kiosks and counters apart from Lulu Hypermarkets.

COMPETITIVE LANDSCAPE

Panda Retail Co continues to lead hypermarkets

Owned by Savola Group, one of the largest conglomerates in the Gulf region, Panda Retail Co continued to lead hypermarkets. Its brand Hyper Panda leads with the widest geographic coverage across Saudi Arabia.

Emke Group remains popular among Asian expatriates

Emke Group’s Lulu Hypermarket has always positioned itself as a one-stop shop for a multi-ethnic customer base and thus offers a variety of products catering to a wide customer group. Lulu Hypermarket continues to remain a preferred hypermarket for Asian and mainly Indian expatriates.

International players enter hypermarkets despite economic slowdown

Amsterdam-based hypermarket brand, Spar entered Saudi Arabia in a partnership with Al Sadhan Trading Co, beginning operations during early 2018 with the opening of three branches in the capital city of Riyadh and later opening more outlets to total eight by the end of the year. Spar aims to target mid- to high-income consumers and is expected to be a competitive player in the channel due to quality services and clean store layouts.

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