F&B, international operations drive stable revenue for Fawaz Alhokair


November 2, 2022 | By RetailME Bureau

Saudi Arabia based lifestyle retailer Fawaz Abdulaziz Alhokair Co. has recorded stable revenue driven by its F&B business and international operations, which counterbalanced the softer seasonal domestic operating environment. The company announced its results for the second quarter and first half of the year ending September 30, 2022 (Q2-FY23 and H1-FY23), reporting steady revenues of SAR1,373 million and SAR3,079 million, respectively.

Commenting on the results, Ahmed Belbesy, Chief Financial Officer, Alhokair said, “We have established a firm base and are confident in Alhokair’s ability to drive forward in the face of market challenges. In KSA, the secular change in consumer spending habits has been further impacted by a return of summer travel following a COVID-impacted two-year period, and the return and rise of pre-pandemic activities.”

“We have successfully maintained a positive revenue trend, supported by our F&B and international segments, which continued to deliver solid results during this period. By persistently optimising our operations we will focus on delivering improvements in profitability and added value for our shareholders.”

Strong segment performance

Alhokair recorded revenues of SAR1,373 million in Q2-FY23 compared to SAR1,361 million in Q2-FY22. This was largely due to the growth of both F&B and international retail sales, which saw year-on-year (YoY) increases of 5% and 9%, respectively. Revenue for H1-FY23 was broadly flat at SAR3,079 million, as a result of the decline in KSA retail sales, which has largely offset the positive impact from the international portfolio and F&B segment.

In addition, online sales remained an area of focus for the company, witnessing a 14% YoY growth in H1-FY23, to SAR 132 million. The e-commerce business in KSA has been gaining traction, with market reports indicating that the segment is expected to grow at a compound annual growth rate (CAGR) of more than 15% by 2026. And Alhokair is committed to digital as a key pillar of its operational upgrade strategy to maintain its position as the partner of choice for leading brands and to provide a distinctive omnichannel experience to its broad base of customers.

International retail operations continued to thrive during the period, with revenues of SAR285 million, up 9% YoY in Q2-FY23, and SAR 552 million in H1-FY23, up 15% YoY, despite currency fluctuations, driven by the sustained positive momentum from CIS countries and Jordan. Alhokair continues to focus on expanding its presence in select strategic growth markets. In addition, international retail sales increased by 8% YoY in like-for-like (LFL) terms for Q2-FY23, largely due to the steady improvement in performance of the CIS countries and Jordan, which is expected to continue, despite the weaker performance from Egypt.

The F&B segment recorded an improvement in revenues, increasing 5% YoY to SAR137 million in Q2-FY23 from SAR130 million in Q2-FY22, with a net opening of seven stores during the quarter. This follows success in the first quarter of the year, with the first streams of income from the Subway brand in the form of sub-franchise royalty fees. Alhokair is advancing on its plan to acquire 45 stores of the existing sub franchises, with the acquisition of 30 of these stores anticipated to be finalised in H2-FY23. For H1-FY23, F&B segment revenues amounted to SAR253 million, increasing 7% YoY.

Selling, general and administrative expenses (SG&A) decreased 2.7% YoY in Q2-FY23 to SAR113.8 million and 6.3% YoY to SAR243.3 million in H1-FY23, as a result of Alhokair’s continued focus on cost rationalisation and operational efficiencies. Overall, SG&A-to-revenue therefore decreased to 8.3% in Q2-FY23 from 8.6% in Q2-FY22, and from 8.5% to 7.9% in 1H-FY23.

The company remains steadfast in expanding its growth segments both locally and internationally, by on-boarding new brands and increasing its digital footprint, while continuing to explore new and unique concepts that address the rapidly changing demands of today’s consumers.

Comments

comments

Previous Article Next Article

SHARE

YOU MAY ALSO LIKE /


Carrefour onboards female-led start-up The Zola Collective

Carrefour, which is owned and operated by Majid Al Futtaim in the 

Continue Reading

January 31, 2023 | By RetailME Bureau
A new branch of Waitrose comes up in Abu Dhabi’s Khalifa City

British grocer Waitrose has opened its newest store in Abu Dhabi’s Khalifa 

Continue Reading

January 25, 2023 | By RetailME Bureau
Its Netherlands Food Week at Al Maya Supermarkets

UAE-based Al Maya Supermarkets has kicked off its ‘Netherlands Food Week’ that 

Continue Reading

January 20, 2023 | By RetailME Bureau
Tesco announces price lock to support consumers amid inflation (PC: Andrew Parsons / Parsons Media)

British grocery retail chain Tesco has announced a price lock on over 

Continue Reading

January 13, 2023 | By RetailME Bureau
Union Coop renews ISO certification

Dubai-based grocery retailer Union Coop has successfully obtained the ISO 22301, an 

Continue Reading

January 12, 2023 | By RetailME Bureau
Spanish supermarket chain Mercadona announces salary increase amid inflation (PC: Mercadona)

Spanish omnichannel supermarket chain Mercadona has announced salary increase amid inflation that 

Continue Reading

January 3, 2023 | By RetailME Bureau
Choithrams partners with Rove Hotels to open 8 new outlets

Grocery retail chain Choithrams will open eight convenience stores across Rove Hotels’ 

Continue Reading

December 30, 2022 | By RetailME Bureau
Géant to open more than 20 stores in the UAE in 2023

Part of regional retail conglomerate GMG, Géant plans to open more than 

Continue Reading

December 23, 2022 | By RetailME Bureau
FMCG online sales growing by 68% in UAE and 58% in KSA

Online share in FMCG sales has been growing all over the world, 

Continue Reading

December 19, 2022 | By RetailME Bureau
Majid Al Futtaim Retail, Standard Chartered launch region’s first Sustainable Supply Chain Finance Programme

Majid Al Futtaim Retail, operator of the Carrefour franchise in the Middle 

Continue Reading

December 15, 2022 | By RetailME Bureau
GMG and Silal partner to support 1,100 UAE farms access local retail market

UAE-based diversified conglomerate GMG and Silal have signed a memorandum of understanding 

Continue Reading

December 12, 2022 | By RetailME Bureau
Lulu Group partners with Amazon expanding grocery offerings to online customers in the UAE

Abu Dhabi based grocery retail chain Lulu Group has partnered with Amazon 

Continue Reading

November 24, 2022 | By RetailME Bureau




f
Download Images RetailME Magazine