Online grocery sales ‘skyrocketing’ in the Middle East, pattern might continue

Online need for groceries has actually seen a “fantastic surge” in the Middle East throughout the coronavirus pandemic, and the pattern might be here to remain, a United Arab Emirates-based retail executive informed CNBC today.

Supermarket operator Carrefour’s online orders increased by 917% in Saudi Arabia from January to June this year, while the United Arab Emirates and Egypt saw dives of 257% and 747% respectively over the very same duration.

“Online has been … soaring since the start of Covid, although we have been growing before,” stated Alain Bejjani, CEO of retail giant Majid Al Futtaim. The business is the special franchisee for Carrefour in the Middle East and Africa.

“There’s been a fantastic surge across the region,” he informed CNBC’s “Capital Connection” on Tuesday. 

That pattern might last beyond the pandemic, Bejjani stated, pointing out a study performed by speaking with business McKinsey.

Survey results revealed that grocery shipment saw a 31% boost in users in the UAE, with 66% stating they plan to continue utilizing the service after the health crisis ends. Similar stats were reported for Saudi Arabia, according to McKinsey.

“We’re seeing about … 200% to 220% increase in the number of online customers on average across the region, and this is something that’s extremely promising,” Bejjani stated.

Beyond grocery stores, he stated the healing has actually been “better than expected” throughout the area. There’s been a “steady return” of customers and an enhancement because early June, though shopping centers are still seeing less clients compared to a year earlier. Shoppers are likewise “much more value-conscious” now. 

Cinemas, hotels and the air travel market are most likely to be the slowest to recuperate, he stated.

More than 18.1 million individuals have actually been contaminated by the coronavirus and a minimum of 691,738 have actually passed away, according to information put together by Johns Hopkins University. In the area, Iran, Turkey and Saudi Arabia have actually been the hardest struck.

Asked when activity may go back to pre-pandemic levels, Bejjani stated that is most likely to occur just when a vaccine is offered, perhaps in the very first half of 2021.

“When it gets to business impact, I think 2022, hopefully, will be a year that will be similar to where we were in 2019,” he stated.

He included that as soon as we surpass the pandemic or discover to cope with it, the “big issue” will be financial security and customer self-confidence. 

“At the end of the day, this is a crisis of trust,” he stated. “For people to come back and consume, they need to have faith, we need to have a consumer confidence level that’s at a much better rate.”