Dubai: Two UAE-based retailers – Emke Group and Landmark Group – have been named amongst the world’s fastest 50 growing retail chains by auditing and research firm Deloitte.
Emke Group, which operates the region’s largest retail chain Lulu Hypermarkets is the world’s 9th fastest growing retail chain, while Landmark Group has been named as the 16th fastest retailer in the world.
They are trailing Amazon.com and Apple Inc — ranked 7th and 8th fastest growing retailer brands in the world, respectively.
“Retail revenue for the 50 fastest-growing retailers increased at a compound annual rate of 22 per cent between 2006 and 2011,” Ira Kalish, author of the report, says. “While the fastest 50 is based on revenue growth over a five-year period, most of the retailers on the list maintained their aggressive growth.”
Global Powers of Retailing 2013, a benchmark report released recently, also named these two UAE-based retailers amongst the world’s top 250 retail groups for the first time.
“The region’s retail sector has displayed strong resilience in the face of global economic downturn and is expected to continue to grow at a steady pace given its attractiveness to tourists and residents in terms of geographic location, developed logistics and availability of diverse and quality shopping options,” Mahboob Murshed, Managing Director, Alpen Capital, said.
According to Alpen Capital, between 2011 and 2016, the GCC’s retail sales are expected to grow at a compound annual growth rate (CAGR) of 7.7 per cent to reach $270.3 billion by the end of the forecast period.
“While the sector presents attractive opportunities, it is highly competitive and retailers need to continue to innovate so that they can achieve sustainable growth and profitability,” Murshed says.
Landmark Group, with revenues of $4.51 billion, has been ranked 198th and Emke Group with retail revenues of $4.25 billion, has been positioned 213rd largest in the world.
Yusuffali MA, Managing Director of Emke Group, told Gulf News, “The last 4-5 years have been very positive for us in spite of the global slowdown. During this period, we opened 32 new hypermarkets and malls across the region that helped boost our sales to $4.25 billion from $2.4 billion and effectively garnering a market share of around 32 per cent in the organised grocery sector.
“This shows the market is very strong for retailers who can provide best quality products and services at affordable prices to consumers. Currently, we have 104 stores across the region and this year we intend to open another 13 new stores including the first one in India. We are also exploring new growth opportunities in Egypt, Iraq and countries in the Far East especially in Malaysia and Indonesia.”
Their turnover, however, are miniscule to the world’s top two retailer chains — Wal-Mart and Carrefour — whose annual turnover rose to $446.95 billion and $113.19 billion respectively.
Despite economic challenges faced by consumers worldwide, the top 250 retailers achieved a 5.1 per cent increase in their sales-weighted, currency-adjusted revenues with an average of 3.8 per cent composite net profit margin, Deloitte research found.
“Despite the economic slowdown, composite retail revenue soared for companies based in Africa/Middle East, Latin America and Asia/Pacific,” Deloitte said in the report. “Growth continued to be fuelled by burgeoning middle classes, youthful populations and sizeable foreign direct investment.
Both the groups are owned by non-resident Indian (NRI) businessmen based in the UAE. Every year, Landmark Group Chairman Micky Jagtiani and Emke Group’s Managing Director Yusuffali MA swap the top two positions in the list of the most powerful Indian businessmen in the Gulf.
While Landmark Group operates more than 1,300 stores across 18 countries in the Middle East and India, Emke Group operates 104 supermarkets, hypermarkets and supercentres in the GCC and India.
Emke Group also has a shopping mall development arm, Line Investments that has been building some of the region’s largest shopping mall where its Lulu Hypermarket brand usually drive shoppers and crowds to the shopping centres. Recently, the group has also started a money exchange house, which is expanding fast with the expansion of the group’s shopping mall chain.
Emke Group has also developed India’s biggest shopping mall in Kochi in South Indian state of Kerala — near Yusuffali’s home.
Although operating as a branded retailer, Landmark Group that operates Splash, Babyshop, Shoe Mart, Centrepoint, Max, E-Max, Iconic, Home Centres, Lifestyle, Beauty Bay among others, is growing at a compound annual growth rate of 23 per cent with a target to cross 2,000 outlets by 2015. It currently employs 40,000 employees. By 2015, the company wants to increase its retail space under management to 29 million square feet, from 20 million at present.
The company, which does not operate any supermarket or hypermarket in the GCC, had earlier made a failed bid to secure franchisee rights for French hypermarket chain Carrefour in India. It is currently expanding Auchan hypermarkets in India.
As part of the company’s strategy, it aims to raise its annual turnover to $5.2 billion by 2015.