Glee hospitality to expand in the UAE despite retail slowdown

Dubai: Restaurant operator Glee Hospitality Solutions plans to expand aggressively in the UAE, despite a slowdown in the retail market.

Glee Hospitality plans to open 11 outlets in the UAE and one in Riyadh, Saudi Arabia across eight new brands this year, Abdul Kader Sa’adi, the company’s managing director, told Gulf News. The UAE outlets will open mainly in Dubai and Abu Dhabi.

Saadi declined to name the brands to open in the UAE and Saudi Arabia, but said they include a “gluten-free bakery concept” and an “Emirati [cuisine] concept”-- both will enter the UAE market in 8 weeks’ time. The operator is also launching all-day dining cafés and a “high-end butchery” outlet in the UAE this year.

Glee Hospitality already operates more than 18 outlets across 11 brands like Mikado Café, Burger Hood, and Rice Creamery in the Gulf, and is a consultancy and an equity holder in restaurants.

It is also in talks to open food and beverage outlets in new markets like Egypt and Nigeria.

The expansion comes as the UAE sees softening retail sales due to the low oil price and a drop in spending by Russian and European tourists because of a weaker rouble and euro against the US dollar, which the Emirati dirham is pegged to.

Weak market

Consultancy Euromonitor International forecasts the market’s value to grow 7 per cent to $53.7 billion (Dh197 billion) this year, lower than the 8 per cent rate in 2015.

“The market has been weak over the last six months and I think it will get harder over the next year for reasons like a lot of supply in the market and less tourism,” Sa’adi said.

“Even with the drop in oil prices, our focus will still be on the UAE, Qatar, Bahrain and Saudi Arabia,” he added.

Lower footfalls and high rents in the UAE are also causing pains for the Glee Hospitality. Sa’adi said 20 per cent of its food and beverage outlets in the UAE are “not performing as they should” because of these factors.

He does not expect “that much of an increase” in same-store sales this year compared to 2015. “ Five per cent would be good,” he said.

He also said that the UAE retail market is saturated with franchises from the US and UK.

“There are a lot of concepts in the market but there is a gap in terms of the quality of casual fine dining outlets,” he added.