Adnoc Distribution to add 10 Géant-branded stores to its portfolio

The newly designed outlets with improved product mix will open in coming months

Adnoc Distribution targets opening one fuel station in Saudi Arabia in 2018. Jack Jabbour / Reuters

Adnoc Distribution signed an agreement with food retailing group Urban Foods to open Géant-branded stores at a number of its service stations, as the UAE’s largest fuel distributor looks to strengthen its retail offering amid expansion plans in its home market and Saudi Arabia.

The rebranded stores will remain under Adnoc Distribution’s ownership and the company will continue to operate them under the deal, which followed a competitive process, Adnoc Distribution said in a statement on Saturday. Urban Foods will oversee category management, supply chain and logistics at the new stores.

“Adnoc Distribution is determined to improve our convenience store offering as we transform into a more customer-centric company,” the firm's acting chief executive, Saeed Al Rashdi, said. “Bringing the Adnoc Distribution and Géant brands together, through our agreement with Urban Foods, will improve choice, convenience and service for our customers.”

The Géant brand will be introduced to 10 existing retail sites – alongside a new design and layout - at seven locations in Abu Dhabi, two in Sharjah and one in Ajman, Adnoc Distribution said, with a new product mix that will include fresh foods, new food to go solutions, groceries, snacks and confectionery. The new stores will be opened in the “coming months”. The companies did not disclose financial details of the agreement, or if they plan to refit more stores in the future.

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The deal with Urban Foods is one of the first major strategic actions taken by Adnoc Distribution since the float of 10 per cent of its shares in December, the first new listing on Abu Dhabi’s bourse in more than six years.

Within the UAE, Adnoc Distribution, which holds a monopoly in Sharjah and Abu Dhabi, will roll-out at least 13 new service stations this year, and extend three of its existing facilities.

The company is eying entry into Saudi Arabia through a franchise model, which will be the first of its kind for the fuel distributor. Expansion into Dubai, the only emirate where the company has no physical presence, is now feasible following changes to how fuel is priced were introduced across the UAE in August 2015, Mr Al Rashdi told The National in January.

The fuel retailer currently operates 360 service stations and 235 Oasis convenience stores, making it the biggest operator in the segment. The company also leases retail and other space at its service stations to tenants that include fast food chains including as McDonald’s, Burger King and KFC.

Adnoc Distribution recorded a year-on-year 6.8 per cent increase in fourth-quarter profit on the back of higher oil prices and an increase in fuel sales. Profit for the three months ending December 31 rose to Dh492.4 million, the company said in a regulatory filing in February.

Full-year 2017 net income climbed 1.3 per cent to Dh1.8bn from 2016. Revenue for the 12-month period rose 11.8 per cent to Dh19.76bn from a year earlier, while total assets at the end of 2017 came in at Dh12.2bn, up from Dh11.44bn in 2016, it said at the time.

Urban Foods operates the Géant brand in the UAE, alongside other French retail brands including Monoprix, Monop’ and Franprix.