Spar and Abu Dhabi Co-Op to roll out stores across the Middle East

Dutch food retailer Spar International is looking at five regional markets and plans to open eight shops in Abu Dhabi.

Retailer Spar plans eight stores in Abu Dhabi. Silvia Razgova / The National

The Abu Dhabi Co-operative Society yesterday revealed plans to expand across the region in collaboration with the Dutch supermarket chain Spar International.

The venture officially opened its flagship 3,500-square metre supermarket in Khalifa City A, complete with a dine-in area for store-prepared food. By the end of this year it will enter Qatar and Lebanon. All the venture's stores will operate under the Spar banner.

Georges Mojica, vice president of Spar Middle East and general manager of Adcoops, better known as Abu Dhabi Co-op, said Adcoops will have daily turnover of €2.5 million (Dh12.3m) by 2016 and will be "the first 100 per cent Emirati food retail chain to go regional".

The new Khalifa City supermarket is the second for the Abu Dhabi-headquartered Spar Middle East - an entity resulting from the partnership - in Abu Dhabi, after the first opened in Khalidiya in 2011.

This week, Spar Middle East will open a 450-square metre express store in the Tourist Club area. It plans to open an additional six stores in Abu Dhabi by the end of this year and is looking for locations in Dubai, Al Ain and Fujairah.

The UAE is the 36th country in the network of Spar International. Sixty-five per cent of the chain's business lies in western Europe, said Gordon Campbell, managing director and chief executive of Spar International.

The chain's largest single market is Austria.

Adcoops will open the Middle East stores under licence from Spar International, with rights to sub-licence the Spar brand name to regional partners.

The Abu Dhabi-based retailer, which runs 15 stores and had €484 million in annual turnover in 2012,  seeks to leverage the partnership with Spar to enter the Arabian Gulf, Levant and North Africa markets.

Among the emerging markets, in China where Spar International has 300 stores, sales clocked €1 billion last year. The 80-year-old Dutch company is a €32bn company in terms of retail sales in 2012.

It grew by €1.36bn in retail sales last year, or up 4.6 per cent, from the same period 2011, Mr Cambell said.

The competitive food retail landscape in the UAE has global chains such as Carrefour, based in France, and Geant jostling for consumer attention with home-grown contenders such as Lulu and Sunrise City supermarkets.

Initially, the Co-op plans to enter Qatar and Lebanon with three stores each, with the first in both countries slated to open in the third quarter of this year. The Abu Dhabi Co-op has earmarked €300m to develop new shopping malls and distribution centres, said Mr Mojica. Spar Middle East aims to open a shopping centre later this year and Al Zaab Market next year. Both would be in Abu Dhabi.

The express or convenience store model would help to create entrepreneurship, to give an alternative to the customers, and help the Government to revamp the grocery business, especially after the closure of a host of mom and pop stores in Abu Dhabi to meet government food safety regulations, said Mr Mojica.

The regulations applied to the capital's 1,300 neighbourhood grocery and convenience stores with a deadline at the end of last year.

The Abu Dhabi Co-op, which started in 1981, would work on a franchise model and connect the smaller stores independently owned to its central system and distribution centres, decreasing the time required to start a grocery store, he said.