Shopping for under Dh20 products? Lulu takes on online giants with LOT

Dubai:  Offering UAE and Saudi shoppers easy access to daily-demand products of under Dh20 or Dh22 is turning into one of the most competitive categories in the Gulf’s retail sector. Leading names such as Abu Dhabi headquartered Lulu are getting into the game, offering instant options for shoppers.

It’s also a move to take on online marketplaces when it comes to daily purchases.

In the UAE, Lulu has three LOT stores up and running. (By 2026, Lulu targets Dh1 billion in revenue from LOT once the network expands to 52 stores.)

Lulu has opened three ‘value stores’ under its ‘LOT’ branding in Saudi Arabia this week – including in Riyadh - carrying only products under SR22. The Lulu plan is to have 50 LOT stores in 2025. The ADX-listed hypermarket operator has not issued separate numbers on the sort of revenues LOT generates.

“This expansion (of LOT in Saudi Arabia) reflects our commitment to the Kingdom’s Vision 2030 and our goal to offer quality, affordable products to all,” said Yussufali M. A., Chairman of Lulu Group. “We aim to redefine value retailing. Four more LOT stores are in the pipeline in the Kingdom.”

Retail industry sources say such brick-and-mortar value stores could grow into something substantial in the GCC shopping space.

“You have the online marketplaces and delivery platforms offering 15-minute ‘Q-commerce’ deliveries,” said a retail consultant. “Lulu with LOT stores is telling value-focused shoppers they can get all those purchases from outlets that are conveniently located.

“When it comes to value or everyday shopping, UAE and Gulf shoppers still show a preference for physical stores. They don’t want to place orders online for Dh20 purchases every time.”

Now, these Lulu LOT outlets are not small by any stretch of the imagination. For instance,  the new LOT in Riyadh’s Al Malaz covers 18,772 square feet of space and with ample parking facilities. (Lulu is positioning the store as a ‘flagship destination for value shopping in the Saudi capital’.)

And with no pressure of minimum purchase price that's there from online vendors.

"Lulu's LOT store format is competing with Miniso, Daiso and other 'dollar store' options," said Sandeep Ganediwalla, regional Partner at Redseer Consulting. "These value retail stores have been popular in the USA and have been gaining traction in our region.

"But I don't think this format is competing with the baqala stores at all."