Retail News Monthly Update — 7th June 2005

Another day, another leisure & residential development and, inevitably, another location for hypermarkets and supermarkets to fight over.

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By  David Ingham Published  June 7, 2005

Remember the consumer|~||~||~|Another day, another leisure & residential development and, inevitably, another location for hypermarkets and supermarkets to fight over. Despite all we’ve been reading recently about disputes between retailers and suppliers, these are boom times for the Gulf’s FMCG sector, as rising populations create more and more business for all parties involved in the supply chain. A rising tide lifts all boats and at the moment it feels like a case of build it (a supermarket or hypermarket) and they’ll come. However, there is a danger that one thing might get forgotten in this gold rush: the customer. Putting together our first UAE Price Index this month gave a reminder of how different the various operators are. Take Geant and Carrefour, the two French hypermarkets that have been brought into the region by ambitious local business groups. The two appeal to a broad cross section of the region’s population by offering low prices and a huge variety of products. The tradeoffs (and for some people they are significant) can be huge crowds, long waits at the till and the need to wheel your shopping some distance back to your car. When you shop at Spinneys, however, you know that you will generally pay higher prices in return for convenient, central, standalone locations and aisles that are normally free of crowds. Enough people still value these things to make the store a success. Then there are the older local retailers, such as Choithram’s and the co-operatives, which aren’t as competitive on price as the new hypermarkets and can’t match Spinneys for ambience, but retain enough loyal customers to stay in business. As rampant construction continues, creating new store locations, and as arguments between suppliers and retailers continue to rage, all involved must be careful not to forget the customer. What we as consumers ultimately want is to do our shopping in a pleasant environment, with the broadest choice of products on offer. The supermarkets that remember this will be the ones that continue to prosper in the long term.||**||

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