Dubai: These days, clothes and accessories retailers and hypermarket operators are working on a new formula. Create space to set up cafes and quick eat counters and they can add a touch of sweetness to profit margins.
Their intention is clear – anchor shoppers to spend as much time as they want at a single location by offering new spending possibilities for them. Pick up the groceries and have a latte too – with almond milk, please. That sort of thing.
So, what should a traditional café operator do? Sweat over the increased competition? Not if you are Yunib Siddiqui, owner and CEO of Jones the Grocer, a name that’s been around for a while. And one that has seen trends come by – and still keep serving up a delicious hot chocolate. Speaking to Gulf News, Siddiqui gives his views on the competition, the trends and some more.
Within the upmarket cafe space, there's some heavy build-up of competition from hypermarkets and even retailers (e.g. M&S). Should standalone cafe operators start getting worried that retailers are muscling in?
Jones the Grocer is not solely operating in the café space and hasn’t done so since 1996. There is a café, an artisan cheese room, a gourmet grocery with over a 1,000 SKUs (stock keeping units) in some stores (40 per cent of which is private-labelled and 80 per cent of which is direct-sourced), a made-from-scratch bakery and patisserie and deli.
We have our own - much-loved - coffee roast which we also retail. Our stores are uniquely designed, with food theatre in mind. Even the ketchup in our burgers is made fresh daily. So long as we continue to focus on what we do well, as we have for 25 years, I am not concerned about hypermarkets, supermarkets, or any other stylish café muscling in.
Do you think you will be looking to use some of the space at your locations to expand the retail range? Beyond the bakery and other produce you already carry? Or would that be too drastic a change for your patrons?
Our flagship stores, such as the one in Al Manara, Sheikh Zayed Road, carries in excess of 1,000 retail SKUs. We ratchet up retail based on location, the commercial/ demographic catchment. At Dubai Airport, we developed an impulse retail range for travellers.
We are opening a new store in Dubai Silicon Oasis shortly and that store will have a large retail assortment covering all our core categories. In Saudi Arabia, our first store is over is over 1,000 square metres and it will carry a larger retail assortment than any of our previous stores.
The ‘grocer’ part of Jones the Grocer has been and will always be significant.
Did 2020 and first-half 2021 prove to be total write-offs? How did the brand cope with the lack of in-store patrons during that phase? Any plans to go deeper into specialty coffee or food?
The first three weeks (of the pandemic) were a shock. We worked quickly to list every single retail product on jonesthegrocer.com on Instashop. Our stores adapted to kerb-side grocery collection, we ran cheese appreciation webinars, and along with our café menu our revenue rebounded to around 60 per cemt of what it used to be within 60 days of the first day of lockdown. There are currently no plans to make any changes to what we do best.
Do you think it would, however, make sense for you to tie up with niche supermarket brands and launch your cafe there?
We’re always open to the idea, but we would never open a café without a gourmet grocery. We see our offer as complementary - not competitive.
Standalone locations - do you plan to cut down on the number of such locations in your portfolio?
Actually, many of our locations are standalone, our brand is predominantly destination driven. Today Jones the Grocer has 15 operating franchise locations. There are 22 new openings slated in a committed franchise pipeline across the Middle East and Asia.
Do you think the time is ripe for the brand to venture into new markets?
We are already trading successfully in Cairo, Doha and soon in Riyadh. We have two stores opening in India in first quarter (2022). Talks are underway to open stores in England, Germany and Canada.
Since our acquisition of the brand from L Catterton (formerly L Capital in 2019, a division of LVMH), and the brand’s subsequent redomicile to the UAE, there are no further plans to make changes to the corporate structure.