Global retail chains cash in on grocery closures

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Global retail chains cash in on grocery closures

Spinneys, Adnoc Oasis, Waitrose and other chains to open convenience outlets in Abu Dhabi By Binsal Abdul Kader, Staff Reporter Published: 21:38 January 6, 2013 Abu Dhabi: Major retail chains, including global players, will open convenience outlets in Abu Dhabi in place of the closed grocery stores. The coming days will see the opening of a wide range of retail shops run by companies such as Spinneys, Snacks, Adnoc Oasis, Select Express, Waitrose and Spar among others in Abu Dhabi, a senior official announced on Sunday. “These new outlets will make up for the ones that are now closed,” Ahmad Abdul Karim Al Sharaf, acting director of communication and community service at the Abu Dhabi Food Control Authority (ADFCA), said in a statement. But the authority did not disclose the number of stores that shut down and those under renovation after failing to meet the December 31 (Monday) deadline. However, salesmen who distribute supplies to these stores told Gulf News that out of the 1,300 grocery stores and small supermarkets in Abu Dhabi, they found a few were still open for business since January 1 (Tuesday). About 50 per cent of them were very small stores that shut down owing to space and financial constraints in implementing the new standards while the remaining are under renovation, they said. Some of the retail chains trying to cash in on the vacuum created by the closure of grocery stores said they would provide home delivery in residential neighbourhoods. Adnoc Oasis has opened ‘Grocery Stores’ that offer home delivery service on Al Salam Street, Al Falah Street and off Electra Street, a staff said. “Many more stores will be opened in the city soon,” the employee, who did not wish to be named, said.

Home delivery service Select Express has already opened a store on Airport Road and more small stores will be opened across the city soon with home delivery service, an executive said on Sunday. Spinneys has a made a submission to the ADFCA on a concept of small stores to be opened in Abu Dhabi, said CEO Johannes Holtzhauen. He said the company plans to open a number of small stores in Abu Dhabi. “We are waiting for the authority’s approval,” he said. Spar, a global retail chain, along with the Abu Dhabi Cooperative Society will open a number of convenience stores in the city soon, an executive said. Circle K, a convenience store chain with more than 10,000 stores across the world, said it plans to open 15 to 20 outlets in Abu Dhabi. “We will provide home delivery,” said Fahmi Al Shawa, managing director, Circle K UAE. The ADFCA said the groceries that had closed down did so on their own as they did not utilise 2011 for renovation work in their premises.

Fear of penal action Although the authority said it would only gradually close non-compliant groceries, owners of small stores said most such outlets had already shut down fearing penal action. The ADFCA said it had increased the number of approved contractors to over 80 in order to ensure that shopkeepers have enough to choose from. Contrary to speculation, the ADFCA has not fixed the price for renovation in grocery premises at Dh200,000. This choice is left to the shop owners, the authority clarified. It said the new regulations governing retail stores will guarantee food safety and address wide discrepancies in quality. “No new licence will be issued except as per the new regulations,” the ADFCA said.

My comments as follows:I consider the closure of small grocery stores in Abu Dhabi has two side effects to the economy and residents. On one hand, the age old and traditional easy access point to your daily home needs, from your phone is now extinct. One cannot lazily call the grocer on a Friday or any other morning and order him to bring to your doorstep a bottle of milk, eggs, a banana or the daily news. For the school going children, gone are the days where they get down from the school bus and run towards the grocer to buy an ice cream or chips packet or chocolate before they take the lift to their home. A move designed to bring in hygiene and quality to products will therefore show an effect on irregular eating desires, which will have to be discontinued as it is not easy to go in and pick these daily desires, buy and eat items, walking all the way to a mega grocer. Thus, I look forward to a bunch of healthier kids from now on, who will reduce automatically the consumption of fancy chips and chocolates. On the other hand, I foresee a huge decrease in consumer sales of daily saleable, over the counter FMCG products, which are sold purely on the basis of its easy availability from the grocer down than its necessity. Thus, small scale business will suffer. Time will tell whether the big giants could match up with the daily needs of the consumer to the level before or better. With the strict requirements to set up an establishment under the present regulations, the costs are bound hit a new time high, silently and indirectly thus consumer will suffer as a result.

Ramesh Menon, Abu Dhabi, United Arab Emirates

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