Waitrose Ups Exposure In Lucrative MGR Market

Upscale UK - based retailer Waitrose has increased its foothold in the lucrative UAE mass grocery retail market. Due to launch its sixth store in Abu Dhabi, the move highlights dynamic growth prospects for value added, premium positioned produce, spurred by both increasing Emirati and expatriate demand.

Under a license agreement with partner Fine Fare Food Market (FFFM), the store points to continuing opportunity for retailers looking to enter the UAE. With buoyant demand for Western food products and increasing awareness of product provenance, purveyors of premium foodstuffs such as Waitrose are enviably positioned to target increasing demand.

BMI forecast growth of 8.4% across the sector in 2013 , with a compound annual growth rate of 11.2% to 2017; indicating potential for growth. What is particularly attractive about the UAE and other Gulf markets is the continued momentum of premiumisation, driven by impressive spending power , which puts retailers such as Waitrose in an excellent position to supply this increasing demand. Shifting consumer habits are also likely to open further scope for acceleration, with health consciousness and the gradual uptake of organic produce to pick up pace over the medium term.

Acceleration Ahead
UAE & Bahrain Total Mass Grocery Retail Sales, US$bn

Given these impressive growth indicators for the retailer , who continues to go from strength to strength in its home market, BMI expects Waitrose to continue to perform in both its UAE and Bahrain outlets. With both countries the only locations in which the upscale retailer has established international operations (despite a n impressive array of international supply deals for the Philippines to the Turks and Caicos Islands ), confidence in the growth potential of both markets is further highlighted.

Indicative of the lucrative nature of the market, competition in the supermarket format will remain substantial from the likes of the MAF - run Carrefour stores , and the EMKE- owned Lulu outlets, both of which have substantial presence throughout the region. U pmarket Emirates retailer Spinneys launch into residential neighbourhoods with modern, convenience-store formats is also potentially demonstrati ve of shifting consumer trends away from the large, mall - style formats favoured by Waitrose. Overall however, the retailer looks well positioned to build on the success of existing Gulf operations, where growth shows little sign of stalling in the near-mid-term.

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