Dubai: There will be some delays in some project completions, but there are no plans to drop any investment plans because of the COVID-19 created business situation.
“There are a couple of our mall developments in India that are now delayed by two or three months,” said Yousuf Ali M.A., Chairman of LuLu Group in an interview to Gulf News. “But those projects – in Lucknow (Uttar Pradesh) and Thiruvananthapuram (Kerala) – will still open before this year ends.
“Our investment plans for this year were based on sound business strategies – the COVID-19 has not made them obsolete.”
Proof of intent
The Abu Dhabi headquartered group is matching words with intent, the chairman added. In the last three days, it opened three hypermarkets in three countries. One was in Abu Dhabi’s Western Region, and the others in Cairo and Indonesia. (But in keeping with the current realities, the openings were done virtually.)
These three locations have pushed LuLu closer to the 200 locations mark for its hypermarkets/supermarkets. It is now at the 191 mark.
“There will be more openings in Indonesia this year itself, which along with Malaysia will be the key expansion markets for us in the next three to four years,” said Ali. “I don’t see ourselves buying any existing supermarket chain in any of the Far East markets. It’s far simpler, less expensive to build our own networks from scratch.
“The Philippines, Vietnam… those Asian markets all hold potential for future LuLu hypermarkets. We have already got sourcing offices there… at the right time, we move up to a retail presence. Going forward, we need to be extra selective of the markets to get into."
Funding is not an issue for the group, which in recent years has expanded its real estate and hotel interests. This included opening a boutique hotel in London earlier this year.
And then in April, an Abu Dhabi investment firm confirmed a stake purchase in LuLu for $1 billion.
Ali didn’t go into the details of what the new funds will bring about in terms of investment priorities. “We have an investment roadmap, and as for our capital expenditure plans for 2021, we will take those decisions at the right time and in consultation with our new partner,” he added.
LuLu’s project portfolio is full up for the near term – there will be new shopping destinations opening in Dubai (at Silicon Oasis), Sharjah and Saudi Arabia. Ali has repeatedly maintained that he will not let go of a brick-and-mortar emphasis even if digital operations are putting in high double-digit growths.
But all through March to June, the brand’s online grocery operations was a big winner as shoppers migrated en masse to picking their needs online. Sources in the company maintain that the high growth rates continue to be maintained even with the restrictions on people’s movements lifted.
The two new malls in Lucknow and Thiruvananthapuram will be complemented by a third, in Bengaluru. But this one is owned by a third-party, with LuLu handling the mall management.
“Mall management is something we have got lot of experience with in the UAE – now, we are just taking that knowledge to India,” the chairman said. “We don’t have a presence in Bengaluru – this will be a good exposure.
“There’s always so much more one can do in India. We are entrenching ourselves in southern India, but with Lucknow opening, we will have a wider reach.”