The country’s biggest hypermarket chains are opening smaller stores across the Emirates, but shoppers could find convenience has a cost.
As more community malls sprout from new housing developments, The National took to the shopping aisles to discover whether the big stores also offered the biggest bargains.
We bought the same basket of 24 branded, everyday items at Lulu, Spinneys, Carrefour and Geant, to determine which was cheapest.
Carrefour Hypermarket at Mall of the Emirates was the cheapest individual supermarket, but shoppers at its smaller Motor City branch paid 10 per cent more for the same goods.
Spinneys Market on Saadiyat Island was the most expensive outlet, with a shopping basket costing Dh430.5 — that’s 19 per cent more than what the same goods cost at Lulu.
Dh85.5 separated the cheapest and most expensive baskets at the eight stores we covered — ranging from Dh345 at Carrefour Mall of the Emirates to Dh430.5 at Spinneys Market. That’s a mark-up of almost 25 per cent.
When hypermarkets and convenience outlets from a given chain are combined, Lulu and Carrefour vie for the title of cheapest supermarket, with just a few fils separating the cost of The National's basket at these stores. The two supermarket brands were 6 per cent cheaper than Geant, and 12 per cent cheaper than Spinneys.
Big outlets of the same supermarket chains were on average 6 per cent cheaper than their smaller counterparts.
“The difference between the huge hypermarket and the neighbourhood express store is the logistical element,” said David Macadam, chief executive of the Middle East Council of Shopping Centres. “If you have a lot of products going to a large store then you have, generally, larger warehouse space and don’t have to pay for them to be shipped elsewhere.”
Customers are paying a premium for the smaller stores’ convenience, Mr Macadam said, adding: “These stores also carry a greater variety of retail lines than small local [outlets], and can be marked up accordingly.”
Lulu was the only supermarket that didn’t charge customers more when they shopped in at a smaller store.
But at smaller branches of Carrefour, Spinneys and Geant, customers had to shell out more for the same goods.
Spinneys Market customers at The Collection on Saadiyat paid 8 per cent more for the same products than customers at the big Spinneys in Khalidiya.
Less than 1 per cent separated the cost of the same basket of goods at branches of Geant in Arabian Ranches and Ibn Battuta.
“Prices vary between hypermarkets and supermarkets, mainly because hypermarkets buy in bulk from suppliers, which makes it easier for them to sell at slightly lower prices than supermarkets,” says Fatimah Sherif, an analyst at Euromonitor International, the statistics agency. “However, this varies across different supermarkets and the type of products being sold.”
Prices of the same products varied significantly between chains. A 375g box of Kellogg’s Coco Pops cost Dh14.25 at Carrefour Market, but was Dh21.50 at Geant.
A 2kg bag of Tilda Basmati rice cost Dh22 at Geant Ibn Battuta, but Dh35 at Spinneys Market on Saadiyat.
Coca-Cola addicts can comfort themselves with a six-pack of cans for Dh9 at any outlet, other than Geant Mega Mall, where a pack costs Dh7.5.
Geant was the only store to offer online shopping.
There was less than Dh1 in the difference between the price of the same basket of goods bought from Geant online and the Geant hypermarket at Ibn Battuta.
Smaller supermarkets not only charged more for items, but often only stocked larger, more expensive versions of the same items.
To account for this, we worked out how much it would cost the consumer to buy an equivalent amount of a product from the same shop.
A six-pack of San Pellegrino sparkling water cost Dh50.5 at the Spinneys Market. That works out to Dh8.4 per bottle, instead of Dh6.25 per bottle at the larger Spinneys outlet. And Spinneys Market didn’t offer the option of buying bottles individually.
Overall, the cost of goods was 5 per cent cheaper in Dubai than in Abu Dhabi.
Calls to Spinneys, Carrefour, Geant and Lulu were not returned.
According to a retail sector report in June by the consultancy AT Kearney, UAE consumers are seeking greater proximity of outlets, leading to more community formats for their convenience.
Hypermarkets are the most popular place to shop for groceries in the UAE. These accounted for 52 per cent of overall sales of grocery retailers last year, while supermarkets accounted for 21 per cent, the report said, according to the research company Euromonitor International.
Convenience stores were the fastest-growing grocery retailer segment in the country last year, with the number of outlets increasing 10 per cent to 443 in 2018, up from 336 this year, Euromonitor said. Total sales in convenience stores in the UAE are expected to touch US$263.7 million in 2018, up from $222.5m this year.
In July, 7-Eleven, the largest operator of convenience stores in the world — it has 52,811 outlets in 16 countries as of March this year, around 17,000 more than McDonald’s — said it would open stores in Dubai next summer.
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