Dubai: RAK Holding is set to enter the UAE's retail sector, with ambitious plans to open 500 NearBuy outlets by the first quarter of 2009, with a total development cost of around Dh150 million.
Speaking at the launch, Rajeshwar Prasad, chief executive of RAK Holding, said 100 outlets will be opened this month and a further 400 stores will open by the first quarter.
"The effect of hypermarkets is threatening the existence of groceries," said Prasad. The idea behind NearBuy is to be "as close as possible" to the customer, so their needs are met on a daily basis, he said.
Prasad estimated NearBuy would take about 30 per cent to 40 per cent of the current market, including small groceries and hypermarkets.
The size of the stores will depend on the location but the average will be around 1,200 square feet.
Prasad said each store will cost between Dh300,000 and Dh350,000 to build and develop.
However, of the initial 500 stores, 300 will be by NearBuy and the other 200 will be in partnerships with existing stores.
Each store is expected to generate around Dh10,000 per day. Prasad said the first 100 stores will generate around Dh15 million combined every month.
"We'll have prices that can compete with existing hypermarkets," Prasad said.
If the stores are successful in the UAE, the model will be replicated the model across the Gulf.
"If you've convinced people in the UAE, you've convinced people all over the world," said Prasad, referring to the UAE's multi-cultural population.
Shaikh Tariq Al Qasimi, head of RAK Holding, said: "We appreciate what small groceries have contributed to the success of the UAE."