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Majid Al Futtaim has outlined plans to invest PKR40bn (US$256.1m) in Pakistan.

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UAE-based Majid Al Futtaim has rebranded its Pakistan-based Hyperstar chain to the Carrefour brand.

Rebranding to enhance modern retail

Majid Al Futtaim has operated stores in Pakistan, through the Hyperstar band, since 2009. The retailer has six Hyperstar hypermarkets in three major cities; Islamabad, Karachi and Lahore. Majid Al Futtaim said the rebranding to Carrefour will “enhance modern retail in Pakistan”.

Gyu Taeg Kim, Majid Al Futtaim’s country manager of Hyperstar Pakistan, added, “The rebranding to Carrefour is an important milestone for Majid Al Futtaim in Pakistan and comes with major expansion plans in the country. Operating under the Carrefour brand will… enable us to deliver an exceptional shopping experience to our customers”.

New loyalty programme and mobile app

As well as rebranding, the retailer has announced the launch of a loyalty programme and mobile app in Pakistan. The rebranded stores will use bio-degradable, reusable bags and offer free wi-fi, amongst a range of other services.

Carrefour Market to open in early 2019

Elsewhere in Pakistan, Majid Al Futtaim will open a new supermarket format under the Carrefour Market banner. The store will be opened in early 2019 in the Mall of Defence in Lahore. The retailer plans to open additional stores in Faisalabad, Gujranwala and Sialkot, amongst others, throughout 2019.

Spanish supermarket chain Condis is set to invest up to PKR139bn (US$1bn) in Pakistan.

Plans to strengthen sourcing and distribution network

Last month, a team of Condis supermarket colleagues headed by the Director of Expansion, Mr. Jose Manuel Castellano visited Pakistan. As reported in ARY News, the team visited several cities, including Multan, Jhelum, Rawalpindi and Islamabad to explore feasibility of entering the market.

With the potential investment, Condis will look to strengthen its sourcing credentials. It plans to import their products to Pakistan, but also export Pakistani products back to Spain so shoppers in both countries can benefit from new products.

Our view

In recent years, we have seen increasing investment in Pakistan. It is a market where traditional dominates, but foreign retailers such as Majid Al Futtaim, SPAR International and Alibabaalongside existing local players such as Utility Stores Corporation, are driving growth in modern trade.

While internal political disputes have led to uncertain trading conditions for retailers (e.g. displacement of shopkeepers), Pakistan’s economy has grown quickly in recent years. This has been supported by investment from China in the China-Pakistan Economic Corridor. Its close ties with China, large population of young people and increased levels of foreign investment is making Pakistan an exciting market for businesses to consider.

UAE Majid Al Futtaim Retail is targeting 10% revenue growth in 2018, as it continues to expand its store network around the world. 

Invest up to DH2bn in store expansion...

The company plans to invest between DH1.5bn (US$408.4m) and DH2bn (US$544.5m) in expanding Carrefour’s store portfolio by 2021, with Saudi Arabia, Egypt, Pakistan and East Africa the key growth markets outside the UAE.

Accelerating development of modern trade

In many of the markets that MAF has outlined for expansion, modern trade is still at its infancy. The retailer's clean and modern stores are setting new standards, offering shoppers greater choice of products including local and global brands, and a destination to shop for food and grocery, home, personal care and general merchandise under one roof.

CEO of Majid Al Futtaim Retail, Hani Weiss, said 'We continued to see a very robust performance in 2017 and are forecasting even higher, growth this year – far above 10%.'

SPAR International has enjoyed ‘strong, continued growth’ in 2017, with sales rising 5.3%, on a constant currency basis, to €34.5 bn. SPAR International said its performance had benefited from its continued focus ‘to grow [its] presence through targeted expansion, and to drive retail development through expanding our multi-format retail strategy’.

Sustained expansion underpinning results

In 2017, SPAR International continued to enter new countries in conjunction with new partners, while its existing retailers sustained the pace of their store expansion too. As a result, SPAR International said:

  • Retail members had added 232 net new stores, bringing its global total to 12,777
  • Stores under the SPAR brand equated to over 7.4 m sq. m of selling space
  • By the end of 2017, the SPAR brand was operated in 48 countries globally. Its international presence was boosted by market entries in five countries: Belarus, Pakistan, Qatar, Saudi Arabia and Ukraine

Sales growing across all regions

At a global level SPAR International said sales grew 5.3%, on a constant currency basis, while by region, it noted:

  • Eurozone: sales rose by 4% to €16.2 bn, with SPAR Netherlands (+7.7%), SPAR Spain (+5.5%), SPAR Ireland (+4.8%) and SPAR Austria (+4.4%) outperforming. SPAR Austria’s continued investment in its operations, which stood at €650m, was called out as helping it to drive that level of growth in its home market. Meanwhile, in the UK, SPAR saw sales in local currency terms rise by 4%.
  • Central and Eastern Europe: SPAR International said it had ‘an outstanding year’, with total sales rising 17% to €5.2 bn. SPAR Croatia and SPAR Hungary were spotlighted, with the former seeing sales growth of 59%, driven by the acquisition of Rewe’s Billa stores, while the latter saw sales in local currency terms rise 8.8%. In Russia, SPAR said it continued ‘ to win market share’ with new stores and like-for-like growth helping drive total sales growth of 18.8% in 2017
  • Africa and the Middle East: SPAR International saw sales growth of 8.5%, to €5.7 bn, with its key country of SPAR South Africa underpinning results. Sales in the country rose 7% to €4.83 bn in constant currency terms
  • Asia: SPAR China continued to expand, ‘ transferring international best practice and multi-format stores in major cities of Southern and Northern China’. At the end of 2017 SPAR China operated 408 stores. In Thailand, following its market entry announcement, SPAR International said it had become ‘ firmly established in the market with over 30 stores opened in its first year of operation.’

SPAR International CEO highlights strategic focus

Discussing its 2017 performance, SPAR International’s chief executive, Tobias Wasmuht, said: “2017 was an extraordinary year of growth for SPAR Worldwide, with sustained growth across all 48 markets where SPAR operates. Our strategy launched in 2016 entitled ‘SPAR: Better Together’, is showing strong signs of benefitting our SPAR country operations internationally… A key focus throughout 2017 has been to grow our presence through targeted expansion, and to drive retail development through expanding our multi-format retail strategy. Operationally we are stronger as a result of investments in the supply chain and are generating more value through better buying and leveraging our growing scale in procurement.”

This in-depth guide to Pakistan explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

We've developed a single, universal methodology for calculating food and consumer goods retail data, supported by our programme of primary and secondary research. This makes Datacentre the most reliable and robust source available for data of this type. 

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