Dubai: The Lulu Group will be pumping in 800 million Saudi riyals (Dh783.45 million) over the next 24 months on eight additional hypermarkets as part of plans to fast-track its network creation in Saudi Arabia. This comes after it deployed 1 billion riyals to open in seven key locations as well as a logistics hub in the kingdom. (The Group also operates eight “commissaries” on behalf of Aramco.)
“We had to commit much more funding to build up to the desired levels there,” said Yousuf Ali M.A., Chairman. “Saudi Arabia remains the one market in the Gulf where we could do much more. The new funds will take us a step closer.
“We have been quite conservative in our cost estimates for the additional stores. The locations are more or less identified and can generate the optimum growth rates we need over the medium-term.
“We plan to launch four more hypermarkets this year, including one more in Jeddah and one each in Hail and Hofuf. By 2018, we will have eight more, including in the holy cities of Makkah and Madina.
The Group has just opened a new location (spread over 200,000 square feet) in Jeddah, and which takes the tally to 125 across all markets it is in.
And more is being added, and more importantly in new territories. “We will have the first in Jakarta up and ready this week and in three weeks make our debut in Malaysia,” said Yousuf Ali. “Outside of Saudi Arabia, the Far East remains the best prospect to grow our top-line organically.”
The push into Indonesia, which will see 10 hypermarkets over a three-year time frame, is being backed by a $500 million commitment.
“The Far East is an ideal market where we can adapt a similar business model to what we do in the Gulf,” said Yousuf Ali. “It’s where we can grow organically as we roll out more locations.”
