Mixed retailers witnessed a slowdown in its sales performance in 201 as consumer spending dipped due to the advent of the economic downturn in Saudi Arabia. Current value growth in the channel slowed down to 6% from the 9% recorded during the previous and the current value CAGR of 11% registered over the entire review period. The leading company in the channel, Al Bandar Trading Co, opened eight new outlets under its flagship department stores chain Centrepoint during the year, bringing the number of these stores to 72, up from 64 outlets in 2015. In addition, newcomers to the channel also performed well, supporting growth. Rubaiyat Modern Luxury launched its first Rubaiyat department store during the middle of 2014 and, due to its healthy performance, it was able to open an additional two new stores in 2016. In addition, MH Alshaya Co also opened a new department store under its popular brand Debenham’s. Aside from new store openings, promotions in the form of discounts for ‘back to school’ periods and during religious holidays such as in Ramadan and Eid Al Fitr, among other peak shopping seasons, helped to sustain growth in the channel towards the end of the review period.
Al Bandar Trading led mixed retailers in 2016 with a 20% value share. It was also the retailer which registered the highest increase in value share in the channel in 2016 as it added one percentage point over the course of the year. The company’s flagship brand in department stores, Centrepoint, recorded strong growth over the review period, to the point where there were 72 outlets operated under the chain in 2016, an increase from the 64 Centrepoint outlets in operation in 2015. The sales promotions conducted by Centrepoint remain highly popular as they offer massive discounts on products. With brand ambassadors including Bollywood actor Salman Khan and Arab singer Nicole Saba, the company’s promotional campaigns have reached not only local consumers but also the country’s substantial expatriate community. Finally, the retailer interacts with consumers on a regular basis through its social media pages on platforms such as Facebook, Twitter and Instagram, as well as through its YouTube channel, which helps to generate brand awareness.
Mixed retailers in Saudi Arabia is still a channel with room for further increase in penetration. There is growing demand for retailers which offer a wide variety of products and this is why mixed retailers is expected to continue witnessing healthy growth over the forecast period as some of the companies in the channel have ambitious growth plans, backed by strong demand. Currently with 118 Centrepoint stores in Saudi Arabia and across the GCC, GBO Landmark Group is expected to achieve 130 Centrepoint department stores by 2021. On the other hand, the expected decreases in disposable incomes in Saudi Arabia due to ongoing economic problems in the country are likely to suppress growth in high-end retailers somewhat. The key for mixed retailers is set to be to continue engaging in promotions and competitions to appeal to the country’s young working population, demand among who is likely to be the primary driver of value sales growth in mixed retailers over the forecast period.
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