Emirates National Oil Company (Enoc) has announced plans to open 30 Zoom convenience stores a year across the country until it reaches 500 by 2025, the energy company owned by the Dubai Government said on Monday.
Enoc said the plan, which will include stand-alone stores, stores in Enoc service stations and franchise stores, is a result of increasing customer demand and population growth.
There are more than 200 Zoom stores in Dubai, Abu Dhabi, Sharjah, Ras Al Khaimah, Fujairah and Umm Al Quwain, distinguished by their red and white signs, popping up in petrol stations and Dubai Metro stations, as neighbourhood corner shops and as larger supermarkets.
Enoc also said it plans to open another 18 stores in petrol stations in Saudi Arabia over the next two years, bringing its total number of stores in the country to 27. The company operates three petrol station convenience stores, with another six due to open later this year.
Because of the low price of petrol, stations in the UAE have historically relied on retail sales at stores and food outlets to generate most of their revenue.
“We are evolving as a true convenience store player, and taking Zoom beyond its original concept as a service station convenience store,” said Saif Al Falasi, the Enoc group chief executive.
“We are studying strategic partnership opportunities with developers and hotels to identify attractive locations, redefining customer expectations and experience by changing our merchandise mix, and exploring newer options of the look-and-feel format.”
Despite an economic slowdown caused by the fall in global oil prices, the retail market in the UAE is still expanding.
According to a forecast from the retail consultancy Euromonitor, expenditure in the Emirates is on track to increase by 7 per cent this year to US$53.7 billion.
The property consultancy CBRE reports that Abu Dhabi and Dubai have a combined 626,887 square metres of retail space under construction, up by 11 per cent on a year ago.
Meanwhile, landlords are revamping petrol stations globally in an attempt to realise their full potential to shoppers. In the UK, 1,375 petrol station forecourts changed hands last year – a 56 per cent increase on a year ago – as private equity investors snapped up £3bn (Dh14.4bn) worth of sites, with plans to sweat the assets and bring in new brands.
In February, Enoc announced it would build 54 new petrol stations in Dubai and renovate two more to cope with increasing demand. In Saudi Arabia the company said it planned to build another 11 stations.
The news comes a year after Abu Dhabi oil company Adnoc announced its plans to build 125 new petrol stations across Abu Dhabi and the northern emirates, and to expand into Saudi Arabia.
lbarnard@thenational.ae
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The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
The National in Davos
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The years Ramadan fell in May
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
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