UAE conglomerate Al Futtaim Group is continuing with its retail expansion plans in Saudi Arabia, a senior official has confirmed.
The company previously announced in 2015 that it would quadruple its footprint in the kingdom from 70 stores to 300 over the next five years.
Since then, Saudi has been hit hard by fall in oil prices, with government revenues dropping and the overall economy witnessing a slowdown.
“Saudi Arabia is going through tough times but I think the team have done their due diligence and are confident that we are going to be able to move forward there,” Steven Cleaver, director of shopping centres – UAE told Gulf Business.
“We are confident that Saudi is a market that we can work in and do well in and add some value.”
While the Saudi market has slowed down, the kingdom’s Vision 2030 – revealed last year – aims to diversify the economy away from oil, with an increased focus on expansion into other sectors.
In line with the new strategy, many developers are eyeing potential new opportunities and have announced major projects.
Last year, Majid Al Futtaim – Al Futtaim Group’s rival following the split of the Al Futtaim empire in 2000, revealed plans to develop two new shopping malls in Riyadh – the Mall of Saudi and City Centre Ishbiliyah.
Set to be the kingdom’s biggest shopping complex, Mall of Saudi will include one of the world’s largest indoor snow parks. The development plan also features 300,000 sqm of shops, restaurants and entertainment areas, residential units, offices and showrooms space, luxury hotels, serviced apartment buildings and other public amenities.
The first phase of development at Mall of Saudi is set to begin by mid-2017 and be completed by 2022.
Meanwhile City Centre Ishbiliyah will feature 250 stores, a 9,000-sqm Carrefour hypermarket, a food court and an entertainment complex inclusive of Magic Planet.
Despite these launches, Cleaver said he was not too worried about growing competition in the kingdom’s retail market.
“Competition [in Saudi Arabia] is no different to Dubai or Doha or Egypt. All of the developers are going there because everyone is seeing the potential in the market. And we deal with it in the same way that we do in Dubai – by making sure we have got a unique proposition,” he explained.
“I think it would be wrong not to go to some of these markets just because the other developers are going there and we are worried about what they are doing,” he added.