Tesco and mid-market brands capture hearts and minds in UAE

The UAE’s luxury malls may have captured the headlines in 2013, but it is the middle-market sector and affordable clothing outlets that have been growing fastest.

F&F, the budget clothing line of the British supermarket chain Tesco, will open its latest store in Al Hamra mall in Ras Al Khaimah today, with a further three stores, all in Abu Dhabi – World Trade Center Mall, Bawabat Al Sharq Mall and Dalma Mall – to open before June.

“We open in RAK tomorrow and we opened in Khalidya Mall on 11 February, top line sales are about 12 per cent ahead of plan right now,” said Troy Zunckel, the general manager at F&F.

“The high-end brands have been very successful in the UAE but there is a market for on-trend brands at affordable prices. The perception of F&F has grown and developed massively since it started. It is bang on trend each season but the prices are amazing, the average selling price for the brand is about Dh76 but amazing quality.”

Retailers have been reporting record sales as the UAE rides a property resurgence and confidence returns.

The growth in the Middle East’s affordable market offerings come as stores in Europe and America fail to deliver the returns they once offered. However, the desire for the affordable brands is not one way as this sector is seen as the region’s growth area.

“The affordable lines of Primark, Matalan, George the Asda brand, are here now so there is a move to more affordable offerings,” said David Macadam, the chief executive, Middle East Council of Shopping Centres.

“If you look at the luxury brands they are very busy. How many Louis Vuittons are there in the country? Therefore if you look at where the opportunity is in the market, it is in the affordable sector. “It’s a niche where there is room for expansion that the luxury sector does not have, that is a crowded market place but at the lower and mid range there is a huge room for expansion. The growth in the market for value brands proves that.”

The upmarket and affordable brands are regarded as complementary to a healthy marketplace, but Al-Futtaim, the licensee of F&F, has big plans for the affordable segment.

“It’s not just value for money, its about fashion, quality and price,” said Mr Zunckel. “Internationally F&F have over 1,600 outlets and its franchise division are targeting 750 stores, globally, in the next five years. I have seven countries that I oversee and we are constantly negotiating on locations and property with malls.

“Once we have found the appropriate location with appropriate terms we move forward with it but we have a five-year strategy which we hope will deliver 40 stores across the seven countries.”

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