JEDDAH — Middle East retail major LuLu Group is ranked as the 25th fastest growing retailer in the world and ranked 165th in the Top 250 Global Powers of Retailing, while another Middle East retailer, Al Futtaim Group (Carrefour) was ranked at 172nd position, Deloitte’s 19th annual edition of “Global Powers of Retailing” report revealed.
LuLu which currently operates 121 hypermarkets and supermarkets across the MENA and India, recorded an annual retail sales turnover of $5.8 billion last year, according the report published by the National Retail Federation. Based on the robust results, LuLu has been on an aggressive expansion drive announcing large investments in Egypt, Bahrain, Saudi, India, Indonesia and Malaysia to the tune of almost $1.7 billion.
Walmart topped the list with revenues of $485 billion in 2014, followed by Costco Wholesale Corporation and The Kroger Co., both from the US. However, UK retailer Tesco which announced its worst ever results last year in UK’s biggest retail loss was pushed to 5th position.
Reacting to the Deloitte report, Yususffali MA, the Chairman of LuLu Group, said “I am very confident of the regional retail market and like in the past, will not slow down our expansion plans. The current negative sentiments on the market are temporary phenomena and companies with strong fundamentals and long term vision will march ahead. Next two years are very crucial for us as we embark on new markets of Egypt, Malaysia, Indonesia while strengthening our presence in the GCC and India.”
"Online is another area where we are going to focus more. Our luluwebstore which was primarily into consumer durables and electronics is now selling grocery and food products giving multi-channel shopping experience to our shoppers,” Yusuffali added.
According to the Deloitte “Global Powers of Retailing 2016”, the eight retailers representing the Africa/Middle East generated composite growth of 19.4 percent, which is 4.5 times greater than the “Top 250” as a whole. The emerging markets have done a lot to immunize their economies from the effects of the global economic crisis in 1998. Governments reduced deficits and “Debt to GDP” levels, accumulated vast foreign currency reserves and also improved the solvency and transparency of their financial institutions. It appears those efforts were not enough as they were still not immune to global issues. The end result has been substantial slowdown in growth in many countries. On the other hand, since the past year, oil prices have plummeted which has resulted in disinflationary pressure in many countries thereby boosting consumer spending in major markets. For the world’s leading retailers, the weakness of oil process has mostly been good news,” said Abbas Ali Mirza, Audit Partner, Deloitte & Touche (ME).
“In the Middle East, despite plummeting oil prices, Lulu Group was one of the fastest growing retailers in the world for the last two consecutive years and with its continued expansion across the region, there is no reason why the group will not be able to continue its double-digit growth in 2016 despite an anticipated squeeze on consumer spending across the Middle East,” added Herve Ballantyne, Partner, Deloitte & Touche (ME) and Deloitte’s Consumer Business Industry Leader for the Middle East.
Deloitte said in its report that most emerging markets suffered as capital outflows put downward pressure on currencies. This led central banks to raise interest rates, thereby dampening growth. During this period Brazil and Russia fell into recession, but India’s economy accelerated, helped by lower energy prices and an easing of monetary policy. Despite tough economic conditions, revenues for the world's 250 largest retailers reached $4.5 trillion in fiscal 2014, an average size of nearly $18 billion per company. — SG
