Dubai: Organised consumer goods retailing in Qatar and Oman has received a big boost with Geant all set to make an entry. The French supermarket major's entry involves a three-way deal with Group Casino, which owns Geant, Retail Arabia, its regional partner, and Al Meera, which will operate the outlets in Oman and Qatar.

The agreement also extends to the "Geant easy", which is the operator's convenience store brand. Currently, there are 10 Geant outlets in the UAE, Kuwait and Bahrain, and the intention is to be "aggressive" in creating new opportunities.

The franchise deal follows a supply agreement signed with Al Meera earlier this year which gave it the right to exclusively sell Casino-branded products in Qatar.

"Our decision to extend the franchise agreement to Al Meera was based on the tremendous potential we see for retailing in Qatar and Oman," said Arif Shaikh, director of Retail Arabia, which is part of the $700 million (Dh2.5 million) BMA International.

Organised FMCG retailing in Qatar and Oman has come a long way in the better part of the last 10 years. "The likes of Carrefour and Lulu have seeded both markets extensively," said Ajai Dayal, a Dubai-based retail consultant.

Scope for growth

"There is still scope for growth — though nothing too dramatic — in Qatar's supermarket space given the population growth forecasts and the projections for the economy in the medium term.

"That would create opportunities for a new entrant, especially as more locations are bound to open up," Dayal said.

"As for Oman, it's pretty well saturated in terms of developments, but the hypermarket experience has caught on quite well and that would work well for a newcomer. GCC consumers are consolidating their shopping habits around supermarkets and hypermarkets."

Al Meera, which has an extensive presence in Qatar's retail space, is going through an "aggressive" organic expansion and has plans to open more than 50,000 square metres of multi-format stores by the end of 2013. Currently operating 22 stores, it plans to raise the tally to 40 during the same period, as well as make an entry into hypermarkets.

"Al Meera is committed to bringing world-class retailers and unique concepts to Qatar and Oman, offering residents in communities the best possible choice," said Guy Sauvage, CEO of Al Meera.

In 1999 Retail Arabia acquired the franchise for operating Géant hypermarkets in key GCC markets. The first hypermarket opened in Bahrain in 2001 followed by Dubai in 2005 and Kuwait in 2009.

Group Casino, which has 11,000 outlets, will now be present in almost a dozen markets. The agreement with Al Meera gives the French group an additional foothold in the region.

Retail sales of supermarkets and hypermarkets in the GCC are estimated to expand at a CAGR of 10.7 per cent between 2010 and 2015, thus outpacing the broader retail industry, according to a latest report by Alpen Capital.

"Fundamental factors propelling food retail sales coupled with increasing penetration of modern retail channels is expected to result in Saudi Arabia being the primary growth driver of the supermarkets/hypermarkets segment in the GCC," said the report.

"Based on a Moderate Growth scenario for our supply side estimates, retail gross leasable area (GLA) in the GCC is forecast to expand to 14.6 million square metres in 2015, from 10.3 million square metres in 2010. The UAE is expected to experience the maximum increase in retail space through 2015 given that 56.4 per cent of the project pipeline is located in the country.

Sufficient supply of space

"We believe that supply of new GLA will be sufficient to meet demand for retail space over the next five years," it said.

Alpen Capital's GCC Retail Industry report expects retail sales to grow at a CAGR of 8.3 per cent between 2010-2015 to $240.3 billion by the end of the forecast period.

Growing per capita GDP and disposable income, an expanding population base and consistent inflow of tourists will boost the region's retail sector.

"We look forward to the expansion of the Géant and Géant easy brands in these two countries [Oman and Qatar]," said Shaikh.

"This will strengthen the brands in the GCC and give us economies of scale with suppliers to negotiate good deals and prices to ensure our customers get maximum value."