How did the concept of SouqExtra! evolve and how did you choose the name?
Our initial study indicated a lack of convenient retail facilities within residential communities, and this is what SouqExtra! brings to the UAE retail scene. Our survey also revealed that 40% of customers would shop at the nearest major convenience store, if one was available in the vicinity.
As for the name, the word ‘Souq’ in Arabic means ‘market’ – the place people traditionally went to fulfill all their shopping needs, and this element forms the core of the SouqExtra! concept. The word ‘Extra’ reflects the fact that we go a step further – we offer more than just a supercenter – we go beyond providing just groceries and basic services to the residents in the communities we aim to serve. Our main objective is to provide a whole new lifestyle experience that is based on convenience.
There are few competitors in the market provides similar services. What is different with SouqExtra!?
We offer a completely different service mix. Besides providing communities with products and services to meet their daily needs, we bring together a complete lifestyle offering in a convenient one-stop-shop. At SouqExtra! families can enjoy a range of retail outlets that includes restaurants, cafés, a pharmacy, a bank, beauty and cosmetic services, as well as a kids’ play area – the outlet mix in each community supercenter is tailored to appeal to the unique customer base in each neighbourhood we are present in.
How do you choose the locations for SouqExtra! centers?
Our location strategy is based on a survey we carried out prior to developing the concept which indicated that the population of UAE Nationals is expected to grow at the rate of 3.4% this year, and that the lifestyle of UAE Nationals is changing to embrace new concepts. UAE Nationals also account for the biggest share of spending at hypermarkets and malls.
SouqExtra! aims to reach out to local communities and provide them easy access to the services they need on a day-to-day basis. By taking retail services directly to local residential communities we are confident we will be very well received across the UAE.
What is your expansion plan in the UAE? And do you have any plans to cover the GCC?
We aim to be the lifestyle community centers National chain, SouqExtra! Management held a number of meetings with municipality officials from the different emirates of the UAE and other governmental authorities in order to seek an exchange of ideas aimed at tying in the community supercenter’s expansion plans with the community development plans of individual emirates. Our plans currently include Dubai, Abu Dhabi, Al Ain (completed) and Fujairah.
Presently we are focusing our attention on projects within the UAE. However, we might expand to reach out to the region in the future.
When is the first SouqExtra! will be completed and in which location?
Ewan Center will be the first SouqExtra! outlet to be completed by the Q3 of 2009, followed by Alain in Q4 same year To date, we have also secured land and initiated development plans in the Alqouz 1, Albarsh 2 at Dubai, Merbah area of Fujairah and in Rashediah, Musherif at Ajman.
Why do you think the new community supercenter concept will witness high demand?
We have based our development strategy on concrete research data – our survey revealed that with increasing traffic and longer travel times, visits to the malls are now down to 2-3 times a week. Accordingly, the demand for community centers is on the rise, with more people preferring to make a quick stop at one of these convenient neighbourhood centers to meet their daily needs. 40% of shoppers approached in the survey said they would shop at the nearest major convenience store.
Moreover, the Modern Trade Sector is witnessing a 9% revenue growth versus a 1.5% revenue growth in the Traditional Trade Sector. Supermarkets at malls do not exceed a growth of 2%, which gives community centers a good chance to flourish. Between 2010 and 2013, the market predictions indicate that the Modern Trade Sector will take over the Traditional Trade Sector.
Why do people tend to go to the big malls for their day-to-day needs anyway?
Proximity is an important issue – A very high percentage of people become frequent customers of major outlets because they live close to them, as per our survey. Malls in the UAE also provide a wide range of services under one roof. However, there is a significant element of time wastage involved in mall visits. Community supercenters provide all services and products in a much more compact area, thus enhancing convenience to customers. Besides supermarkets at malls do not exceed a growth of 2%, which allows community centers as part of the Modern Trade Sector (predicted to grow at 9%) to flourish. And with the customer-tailored services SouqExtra! has to offer, we are confident it will be the number one shopping destination among local communities.
What challenges are you facing currently?
The market condition changes is a major challenge, which forced to re-caluclate our performance looking for safer options while proceeding with project, Although the market situation is in our favor now especially we are in the development phase but we keep an open eyes for the future we are ready for Operations.
There is a general perception that retail outlets with proximity to residential communities have higher prices, but due to the convenience factor, consumers are willing to pay. What price differentiation would SouqExtra! offer?
At SouqExtra! our focus will be on providing our customers with superior value for the price they pay. Through the services we offer, we aim to create a lifestyle offering that is based on convenience and high-quality. Our pricing strategy will reflect the quality of the products and services of the well-known and trusted brands who will be our partners.
Did the global financial crisis affect your plans or business as a whole?
UAE is one the countries least affected by the global economic meltdown, particularly with respect to the retail environment, so we can’t really say that it had a significant impact on our plans. The SouqExtra! concept aims to meet real consumer needs and is built on a strong business model. Moreover, our well-established and reputable partners such as the Lootah Group, Emirates Post Group, National Bonds Corporation, Bonyan Holding, Abbasi Group and a number of high net worth individual investors provide a strong financial backing to this innovative initiative and confirm the market’s faith in the SouqExtra! concept.
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