Michael Hussey, Bord Bia, Dubai Office
The Kingdom of Saudi Arabia is the largest retail market in the Gulf Co-operation Council (GCC). The economy is oil-based, with strong government controls over major economic activities. The GDP of Saudi Arabia was $921.7 billion in 2013, with GDP growing at 6.8%. Inflation is at 4% currently. Saudi Arabia has a population of around 29 million, which is expected to rise to over 38 million by 2025. The population is young, with 47.8% aged 24 and under.
The modern retail trade accounts for around 46% of the total market, but is growing strongly. This is reflected in the number of stores being opened by all the current chains.
Hypermarkets are the most important growth format in the Saudi market. The largest retailer is Panda, who have 210 outlets and are aiming for 250 by the end of 2015. They appeal to the mass market but are actively looking to broaden their range of “western products”. Panda is owned by Al-Azizia Panda United Inc. They are aggressively expanding their geographic coverage and are now opening Panda local neighbourhood stores. They currently have a presence in 33 cities.
Al Othaim, owned by Abdullah Al Othaim Markets Company, has a total of 129 stores. The bulk of their sales are derived from supermarkets, with this category accounting for a 48% value share of its sales in 2013. The retailer targets average and below-average income groups with more emphasis on local foods than its competitors.
Bindawood Group operate stores under the Bin Dawood (supermarkets) and Danube (hypermarkets and supermarkets) banners. There are 18 Bin Dawood stores and 11 Danube stores. They have the strongest presence in the Western province.
Al Raya have a total of 30 stores across the Kingdom. They carry a good range of imported products with their target market being expats and wealthy locals.
Carrefour is expanding rapidly and is targeting middle class and wealthy locals and expats. They currently have 14 stores, with 6 hypermarkets.
The Saudi retail market is expanding strongly due to the shift by consumers to modern retail outlets, population growth, and the growth in incomes. This presents opportunities for Irish food suppliers.
For further information contact Bord Bia Dubai, michael.hussey@bordbia.ie
