Carrefour in talks over Saudi curfew challenges

The coronavirus outbreak has led to a big increase in sales at Carrefour stores in Saudi Arabia. (Supplied)
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Updated 25 March 2020

Carrefour in talks over Saudi curfew challenges

  • MAF CEO Alain Bejjani: We are engaging with the (Saudi) government to try to get some special process for delivery to people during curfew hours
  • MAF said that there had been a 50 percent rise in online sales this month, sales of liquid cleaners and soaps were up by about 1,000 percent, while there was also big demand for freezers

DUBAI: The company that runs one of the biggest supermarket chains in Saudi Arabia, Carrefour, is in talks with the government to try to ease some of the Kingdom’s curfew restrictions amid an unprecedented boom in home grocery deliveries during the coronavirus COVID-19 outbreak.

Alain Bejjani, chief executive of Dubai-based Majid Al Futtaim Group (MAF), told Arab News that delivery orders had soared more than 50 percent across the region. Saudi Arabia recently extended curfew hours to slow the spread of the disease.

“Restrictons on travel are making things difficult everywhere and Saudi Arabia is no exception. We are engaging with the government to try to get some special process for delivery to people during curfew hours,” Bejjani said.

“We fully support the measures that have been taken, but even if there is a curfew, there is a need to make it as comfortable as possible for people. The government has been very understanding,” he added. 

One suggestion is for a special license to enable delivery workers to be on the streets during curfew hours.

Saudi Arabia is to lengthen the curfew hours from 3 p.m. to 6 a.m. on Thursday, and has also announced curbs on travel between different cities and provinces in a move to prevent transmission of the COVID-19 virus. Longer curfew hours also impact the Carrefour workforce which has to travel to stores or delivery depots.

Bejjani said that increased travel restrictions would have an impact on its regional delivery systems. A lot of the produce its sells in the UAE and other regional markets is manufactured in Saudi Arabia. “Saudi Arabia is very important as a consumer market, but it is also a big production center for us,” he said.

But he was confident that the region would not see the kind of panic buying witnessed in European supermarkets, where shelves have been stripped of goods by worried shoppers. He said that MAF has a strategic stock of goods for three months supply to its outlets, in contrast to roughly 40 days reserve in Europe.

“People in Europe thought they might run out, but we have more in reserve. There has been no panic buying in our stores,” Bejjani said.

But the virus outbreak has led to a big increase in sales at Carrefour stores in Saudi Arabia and elsewhere. MAF said that there had been a 50 percent rise in online sales in the first three weeks of this month, and that it was redeploying workers from elsewhere in the business to help cope with the demand.

Sales of liquid cleaners and soaps were up by about 1,000 percent, while there was also big demand for freezers in which to store perishable food, Bejjani said.

Some 1,015 workers in MAF’s leisure and cinema business had been retrained and redeployed in an ongoing program to re-skill them for supermarket work, either in-store or in fulfillment centers and other delivery roles. “It is heartwarming to see how agile and adaptable people can be,” Bejjani said. 
Around 7 new fulfillment centers have been opened in the region since the outbreak began.

MAF, which also owns the Vox cinema chain, has put its ambitious program of cinema construction on hold since the government ordered film theaters to be closed earlier this month. “Saudi Arabia is a great cinema market and we are looking forward to coming back as soon as possible, but right now it is impossible,” Bejjani said.

He added: “In times of uncertainty, our commitment to our community of customers, employees, tenants and suppliers only becomes stronger. While we are ensuring that our customers get what they need when they need it, we are working with all stakeholder groups to ensure that we come through these challenging times together.”


S&P cuts Australia’s sovereign outlook, affirms AAA rating

Updated 08 April 2020

S&P cuts Australia’s sovereign outlook, affirms AAA rating

  • S&P affirmed Australia’s prized rating but said a downgrade was possible within the next two years
  • Australian long-dated bonds sold off after S&P’s outlook downgrade

SYDNEY: Global ratings agency S&P on Wednesday lowered its outlook on Australia’s coveted ‘AAA’ rating to “negative” from “stable” in anticipation of a “material” weakening in the government’s debt position as it splashes out a large fiscal stimulus package.
S&P affirmed Australia’s prized rating but said a downgrade was possible within the next two years if the economic damage from the COVID-19 outbreak is more severe or prolonged than it currently expects.
Australia is among a handful of countries in the world to boast the best ranking from all three major ratings agencies.
But it has come under a cloud as the pandemic has dealt Australia a severe economic and fiscal shock, with S&P predicting the A$2 trillion ($1.23 trillion) economy would plunge into recession for the first time in nearly 30 years.
This would cause a “substantial deterioration of the government’s fiscal headroom at the ‘AAA’ rating level,” S&P said in a statement.
Treasurer Josh Frydenberg said the outlook downgrade was “a reminder of the importance of maintaining our commitment to medium term fiscal sustainability.”
The government has pledged A$320 billion ($197.73 billion) in fiscal spending, or 16.4 percent of annual economic output, to backstop the economy and prevent a crisis as the pandemic shuts companies and leaves many unemployed.
Some fund managers said Wednesday’s outlook downgrade was unlikely to raise the government’s borrowing costs by much though it could hurt Australian companies whose ratings are dependent on the sovereign rating.
“A large proportion of credit funds are mandated to maintain funds in a specific ratings bucket,” said Asmita Kulkarni, Director Investment Strategy at FIIG.
“With potential widespread downgrades we could see funds being forced to sell-down investment which would result in a widening of credit spreads.”
Australian long-dated bonds sold off after S&P’s outlook downgrade with 10-year yields jumping to 0.967 percent from 0.909 percent at Tuesday’s close.
Economists said they do not expect a rating downgrade prior to the federal budget due on Oct. 6.
It was only in September 2018 that S&P upgraded Australia’s outlook to “stable” from “negative” as the budget came close to balance. The government had even projected a surplus for the current fiscal year and next.
While all those predictions are now under water, Australia’s public debt is still in good shape, S&P noted.
“While fiscal stimulus measures will soften the blow presented by the COVID-19 outbreak and weigh heavily on public finances in the immediate future, they won’t structurally weaken Australia’s fiscal position,” S&P said.
“This expected improvement is a key supporting factor of our ‘AAA’ rating.”