Retail Roll Out Strategy

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Retailers, department stores, restaurants and even kiosks have embraced the competitive and lucrative Middle Eastern market over the past decade, but is there still room for expansion?

New shopping malls, fluctuating GDP and strong focus on entertainment and tourism in the region indicate that there are still opportunities for retail businesses to flourish in strategic locations. The Middle East and North Africa (MENA) reached 1.8% real GDP growth in 2017, and the rate is expected to hit 2.7% by end of 2018. (Oxford Economics).

Most of the high street fashion names have already entered the MENA market and for many, it has proved an effective launch location for international growth and most importantly brand awareness.

The focus on convenience and F&B has offered retailers the opportunity to expand. Circle K, has announced a growth plan of ten more outlets across the country as well as centralizing its logistic operations. Coffee Planet on the other hand is expanding to Oman through a franchise agreement and will plan to expand through 11 outlets across the Sultanate. On a KSA level, following the announcement of re-establishing cinemas across the Kingdom, AMC Cinemas, the operators of the first movie theatre in Riyadh, are expanding across the country to capitalize on the entertainment opportunity.

The e-commerce’s emergence in the region and people’s spending awareness requires a roll out strategy implementation for the success of any new franchise or even home-grown concept. Whether it’s an F&B brand, a grocery store, a service shop, a fashion retailer or an entertainment concept; understanding the market and targeting the correct locations create a strategic approach to the brand in the region.

The new era of retail and the changing dynamics of the MENA region has dictated the need to establish a balance between physical stores and online trading, offering discounts on trading platforms should be complemented by strategical experiential retail space.

Here are three considerations, retailers and operators should consider for any brand assessing an expansion:

Know your market
Whether it’s operating a supermarket in North Africa or expanding a Cinema in KSA, understanding the market’s capacity shapes up the expansion strategy by defining the potential demand that can be absorbed by the brand.

Target your audience
Expanding into a market or breaking into new countries is a challenging protocol for any brand. However, the question of who will buy your products should remain at the core of the planification. Capitalizing on brand awareness to the expense of targeting the correct market is a tempting slip-up for most brands. Equilibrating both is be based on the adequate demand generators of the brand.

Phase your timing
Dubai is expected to witness the completion of 1.1 million sqm of GLA in the upcoming two years, Oman is waiting for the delivery of Mall of Oman, Al Araimi Boulevard and Mall of Muscat expected to add 407,500 sqm to the retail market. Where to expand? Which market to consider? And most importantly when. A sifting exercise prioritizes the expansion of the brand chronologically and strategically.

‘If you build it, they will come’ is a misconception that has resulted in the failure of many brands. Taking informed decision based on analysis, phasing and even micro locations consideration is the key to a successful roll out expansion.

We can help you plan and execute a roll out strategy that delivers all the benefits and aligns with your brand’s image and objectives. Our services help you track your existing real estate portfolio, assess future growth and target opportunities.

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Joelle Elias

Author: Joelle Elias

Joelle Elias is a retail analyst

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