MAF Retail targets 10% revenue growth
Majid Al Futtaim Retail, the supermarkets unit of the Dubai conglomerate, is aiming for 10 per cent year-onyear revenue growth in 2018, as it expands its Carrefour regional franchise and weighs acquisition opportunities in Saudi Arabia, its chief executive said.
The company plans to invest between Dh1.5 billion and Dh2bn in expanding Carrefour’s store portfolio by 2021, with Saudi Arabia, Egypt, Pakistan and East Africa the key growth markets outside the UAE, Hani Weiss told The National.
“We continued to see a very robust performance in 2017 and are forecasting even higher, growth this year – far above 10 per cent.”
MAF Retail has around 250 Carrefour stores – in either supermarket or hypermarket format – across 38 markets in the Middle East and Africa and plans to double that figure within the next five years.
It is a private company and does not disclose detailed financials.
MAF Retail has operated the Middle East Carrefour franchise since 1995 and Mr Weiss does not oversee its other segments, which include fashion and specialist retail (merchandise).
The supermarkets business – of which 70 per cent is food and 30 per cent is non-food – witnessed 8 per cent revenue growth for the full-year 2017, driven largely by MAF Retail’s acquisition of another supermarket franchise holder Retail Arabia last year. Under the deal, it acquired 26 Geant hypermarkets in the UAE, Bahrain and Kuwait and four GulfMart stores in Bahrain, and rebranded them to Carrefour.
The company is scouting for a potential acquisition of a supermarket operator in Saudi Arabia, the Arabian Gulf’s largest market. No talks are ongoing yet but Mr Weiss hopes to sign a deal in 2019 or 2020.
It was reported last year that MAF Retail was eyeing a stake in the Lebanon operations of another UAE supermarket chain, Spinneys. Mr Weiss said no discussions are taking place at the moment and, “Spinneys is not for sale”. Spinneys’ products retail at a higher price point than Carrefour and MAF Retail does not wish to start tapping a broader demographic than it already does, he said.
Growth in 2018 and beyond will be driven by both digital and bricks-and-mortar expansions, Mr Weiss said. The UAE will have around 158 stores by the end of the year from 67 today, while Saudi Arabia will have 70 stores by 2021 from 17 at present, and Kenya, with six stores at present, has another four in the pipeline. MAF Retail announced plans in February to open 200 stores in Egypt, and it plans to enter Uganda in 2019.
At the same time, MAF Retail has invested “hundreds of millions of dirhams” this year in improving Carrefour’s digital operations. Investments include the establishment of a team of up to 150 data scientists to analyse customer data, a “Scan and Go” payment system using a mobile app, and the Carrefour UAE online delivery system, which promises one-hour delivery across the UAE by the end of 2018.
MAF Retail is also in talks with a “large European logistics provider” to develop a point-to-point distribution network for Carrefour in the Middle East, with a deal expected in the coming months, Mr Weiss said.