Retail technology firm 24SEVEN has unveiled data on the current UAE grocery retail market. The company, which provides hardware and software for retailers, conducted research across more than 5,000 grocery stores in the UAE. One of the key findings was an estimate on the size of the market, with UAE grocery retail anticipated to exceed US$40 billion this year.
UAE’s grocery retail
With the current Spinneys IPO, there is an increased focus on grocery retail in the Emirates. 24SEVEN’s report also identified the importance of smaller grocery stores to the UAE economy. 81% of grocery retailers in the UAE are identified as “baqalas” – stores that are 50 square metres or smaller. Despite not being as vast as the UAE’s well-known supermarket and hypermarket chains, 60% of UAE residents visit small grocery stores every week.
24SEVEN’s report called “Inside the Baqala,” includes proprietary research data and a public survey into preferences. It found that the top reason for shopping at a baqala is the convenience of location with 59% saying they shopped at a baqala because it was close to home or work, followed by access to specific products/items (31%), extended opening hours (27%), friendly staff (20%) and a preference to shop local (20%).
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The research highlights that the introduction of embedded financial services could play a key role in boosting revenues across the grocery retail sector. Currently, under 1% of small grocery outlets deploy advanced financial technology in their stores, and 70% do not have a connected point-of-sale (POS) and checkout system, making it harder to compete with larger players.
Jarrar Shah, CEO and Co-Founder of 24SEVEN said, “There is a huge opportunity for grocery retailers to offer a greater range of services and boost the UAE economy. Embedded financial technology can uplift revenues for stores through services like remittance and bill payments. However, currently around 70% of stores do not have the right technology to compete.”
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The report also discovered that if baqalas were able to offer “buy now, pay later” (BNPL) services, it could account for up to US$338 million in transactions per year. 24SEVEN insights suggest only about 4% of payments are currently via in-store credit (BNPL, manual ledger etc.). However, based on preferences for BNPL in a consumer survey, this could rise to 26% of transactions or more.
24SEVEN
24SEVEN works closely with small grocery stores to optimize their Point-of-Sale (POS) into a “Point-of-Everything,” supporting the UAE’s vision towards digital transformation of services. By providing embedded fintech services into daily operations, 24SEVEN data indicates a typical UAE baqala could generate between 8 to 12% more revenue per month.
tanvir@dubainewsweek.com
