RIYADH, 26 June 2007 — Al-Othaim Markets Co. has launched a new logo as part of a major campaign to reflect its new corporate identity prior to its going public.
“We will spend SR20 million on this campaign which has been undertaken in response to the changes in the market,” Yousef M. Al-Gafari, the company’s executive president, announced at a press conference yesterday.
The company would spend SR200-300 million to finance its new projects. Currently, its total turnover exceeds SR2 billion, with an annual rate of growth standing at around 20 to 25 percent.
He said the new logo embodies the principles that the company stands for in terms of its values and principles as well as customer service.
A new corporate identity has also become necessary in view of the fact that Al-Othaim has a 10 percent market share in the Central Province and four percent Kingdom-wide, where sweeping changes have been noticed in the retail sector during the last three years.
Asked about the need to revamp its image, the executive president said the Saudi market has witnessed sweeping changes during the last 50 years since the inception of the company.
“We have to adapt to international standards in the Kingdom, where over 60 percent of the population are youth. So this message is intended to target the youth. We also want to convey the idea of freshness of our products and to underline the fact that we have transformed ourselves from a supermarket in the past to a hypermarket at present.”
He said the need for a new corporate identity has also been dictated by the changes in consumer behavior.
“Unlike in the past, today’s consumer prefers one-stop shopping to shopping from one place to another for family needs. Moreover, the time factor and prices are important for them. So we had to address these concerns through special promotion and special offers as part of our marketing strategy.”
Providing an overview of the company, Al-Gafari said they have some 76 outlets throughout the Kingdom. Two more hypermarkets, one in Riyadh and the other in Al-Ahsa (Eastern Province), are set to open within the next three months. There are an estimated 100-150 shopping malls in the Kingdom, where major players from other countries are also entering the market.
Asked about the impact of the proliferation of malls on the market, Al-Gafari said that despite the competition there was a slight increase in consumer prices due to the hike in oil prices, since most of the groceries were imported from Europe. However, the stiff market competition ensured that the price rise was minimal, obliging the hypermarkets to operate on low profit margins.
The impact was also felt on the Kingdom’s wholesale business, which was shrinking to some extent with the movement of consumers to malls. “However, some families still prefer to buy from baqalas (small shops), which, in turn, source their supplies from the traditional wholesalers.
Referring to their Saudization program, he said 25 percent of the company’s 4,500 strong work force are Saudis. “We are investing a lot in bringing new technology and also human resources development, for which there is an annual budget ranging from SR 15-20 million annually.”
In this context, the executive president disclosed that they have set up an academy to train Saudi graduates for free. “We qualify them and provide job opportunities for ten percent of the recruits in our malls, while we market the remaining 90 percent to other competitors. We are doing this as part of our corporate social responsibility.”
The company, he pointed out, was exploring “seriously” the possibility of setting up a training program for women. “The program would not necessarily be for the hypermarkets. But we want to see whether it could be tailored to the needs of government and other retailers to see what kind of job opportunities could be created for them.”
