SPAR International Expands Further Into The Middle East

3 min readUpdated Jan 30, 2018Jan 30, 20186:50 AM

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SPAR International has announced the brand’s entry into the Saudi Arabian retail market. Partnering with the well-established Saudi conglomerate, the Al Sadhan Group, SPAR has ambitious plans to open 40 stores in Saudi Arabia by 2020.

Yesterday, three SPAR stores were opened in Riyadh, the nation’s capital and primary economic hub. Plans are in place to open a further five stores throughout 2018, bringing the total number of stores in the country to eight by the end of the year.

The first SPAR stores in the Saudi Arabian market will be aimed at the mid- to premium sector of the retail market. However, as the brand develops in the country, SPAR plans to launch stores in all economic sectors, providing all customers with competitive pricing for the best global and local products.

The Al Sadhan Group is a family owned business established in 1952. Its services include real estate, facilities management, food retail and brand development. Al Sadhan Stores operates the company’s retail arm employing 1,500 colleagues and has a long history in the market, being the first supermarket to obtain a business licence in Riyadh in 1952. SPAR International began their partnership with Al Sadhan in 2016, soft launching the first SPAR store in the second half of 2017.

SPAR International has provided extensive support to Al Sadhan in the lead-up to the store openings including study tours to other SPAR markets and fostering awareness of the SPAR Way of Working. Support was also given in logistics development, supply chain creation and store design.

The stores will benefit from the access to globally and locally sourced SPAR Own Brand products, expertise in category management and the support from SPAR International’s design and development teams to ensure modern and dynamic store design.

SPAR International will also support SPAR Saudi Arabia to utilise the strengths of the joint buying model to ensure competitiveness.

“The first SPAR stores in the Saudi Arabian market will be aimed at the mid- to premium sector of the retail market.”

The partnership with Al Sadhan in Saudi Arabia builds on SPAR International’s existing partnerships in the wider region, notably in the United Arab Emirates, Oman and Qatar.

A grand opening ceremony took place in Riyadh, with ribbon-cutting ceremonies at the three high-quality SPAR Supermarkets. Thereafter, Tobias Wasmuht, SPAR International’s Managing Director, was joined by officials from the Netherlands embassy and senior management from Al Sadhan Group to celebrate the brand’s official debut in Saudi Arabia.

Speaking at a press conference announcing SPAR’s entry into the market, Tobias Wasmuht, Managing Director of SPAR International said:

“With a growing young population, rising GDP and increased consumer purchasing power, the retail market in Saudi Arabia has been growing steadily. We are delighted to enter this exciting and dynamic market with such an established and well-respected Partner as Al Sadhan Group.

In addition, the new partnership provides SPAR with yet another important base in the Middle East, a region that is becoming more and more important to SPAR International’s strategic business development.”

Mr. Mohammed bin Abdul Aziz Al Sadhan, Chairman of Al Sadhan Group commented:

“We are very proud of this partnership with SPAR International. Having the right mix between SPAR International’s knowledge and best practice along with our experience in the local market will provide our customers with an excellent retail experience. The SPAR brand products will be a key factor in our success, and we are getting great support from SPAR International’s team to source items from SPAR partners around the world.

Also, this partnership is in-line with the Saudi Arabian vision 2030 and the support we have from the Saudi government for the development of the Saudi market.”

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What this means

SPAR International’s aggressive target of 40 stores by 2020, with eight by year-end, demonstrates strong commitment to Saudi Arabia's growing retail market. Partnering with the experienced Al Sadhan Group, which has deep local roots since 1952, mitigates entry risks and provides immediate scale, a contrast to smaller-scale market entries like Odi's direct sales in Australia. By initially targeting mid-to-premium sectors before expanding, SPAR aims to establish brand perception before broader market penetration. This strategy pressures existing local supermarkets like Al Sadhan's own, and other international players, to enhance their offerings. Success hinges on SPAR's ability to consistently deliver its promised competitive pricing and global/local product mix. We will closely watch the number of store openings by the end of 2018.

Sarah Chen · Retail News Asia newsroom

Questions & Answers

What is the initial target market segment for SPAR stores in Saudi Arabia?

The first SPAR stores in the Saudi Arabian market will be aimed at the mid- to premium sector. However, SPAR plans to expand to all economic sectors as the brand develops.

How many SPAR stores are planned to be open in Saudi Arabia by the end of 2018?

Three stores were opened yesterday, and plans are in place to open five more throughout 2018. This brings the total number of stores in the country to eight by the end of the year.

What support has SPAR International provided to the Al Sadhan Group for this market entry?

SPAR International provided support in logistics development, supply chain creation, and store design. They also offered study tours and fostered awareness of the SPAR Way of Working.

When did the partnership between SPAR International and Al Sadhan Group officially begin?

SPAR International began their partnership with Al Sadhan in 2016. The first SPAR store had a soft launch in the second half of 2017.

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