Kuwait’s Alshaya Group CEO Says Decrease in Hostility Toward American Brands; Flood Damage Minimal

Alshaya Group Plans to Open 400 New Stores Amid Recovery from Recent Floods

April 25, 2024: Alshaya Group plans to open 400 new stores this year as it recovers from “minimal” damage from recent floods in the UAE and quickly returns to normal.

John Haddon, CEO of the Kuwait-headquartered group that owns major brands including Starbucks, Victoria’s Secret and Bath & Body Works and H&M, said the company will open more Starbucks and Shake Shack stores by 2024, as well as grow Cannes Chicken. fingers.

The owner also opened a new brand, California-based Chipotle Mexican Grill’s first Middle Eastern restaurant in Kuwait City.

“We are a big believer in F&B and we are a big believer in the market here, especially in Saudi and the UAE,” Hayden told Zavya at The Retail Summit (TRS).

An Aloe Yoga store will open in Qatar next month, followed by an expansion of the Bath & Bodyworks franchise in Abu Dhabi in September.

While Alshaya saw some stores close for three days during and after unprecedented rain in the UAE last week, Haddon said all 800 stores have now reopened, quickly returning to normal after the government purge, indicating the financial impact of lost sales. The group was very small.

Challenges

The first thing visitors to the AlShaya website will now see is a $3 million donation to the World Central Kitchen by the AlShaya Foundation and the Starbucks Foundation. A food aid distribution mission in Gaza earlier this month.

The donation follows widespread reports last year of boycotts of American brands such as Starbucks, which in some consumers’ minds are associated with Israel, and the attack on Gaza following Hamas’s incursion into Israel.

While rising tensions and strikes between Israel and Iran have kept the conflict in the news in recent days, he said hostility toward some American brands has receded after an initial blow and some misinformation last year.

Chipotle is an American brand, and other than those two or three quick-service restaurant (QSR) brands, there is no problem with American brands in the region,” he said.

“Out of our 70 brands, 40 are from the US and are doing well. The real problem lies in the countries closest to the conflict.

He said the UAE was not affected by the widely reported boycotts, although there was little impact on Saudi Arabia. However, countries closest to the conflict, including Bahrain, Kuwait, Qatar, Lebanon and Jordan, saw the greatest impact.

“The last quarter of last year was tough, but now it’s picking up again,” he said.

“We are not a political organization; We want to sell good coffee, good food and good clothes, so it’s better to keep a low profile. At the same time, we recognize colleagues from the region,” he said.

He said initiatives such as creating a new local blend of Starbucks coffee would be considered relevant to the region rather than a purely North American brand.

Egypt

Alshaya closed 60 stores in Egypt earlier this year as the country struggled with devaluation and inflation.

But Haddon said there were 200 AlShaya stores across 12 brands and the market had seen a “small recovery” as the country tries to recover after the International Monetary Fund (IMF) agreed to an $8 billion bailout loan last month. In Egypt.

“We’ve integrated, we had to, but there’s no plan to grow at the moment. You can’t ignore a market of 100 million people,” he said.

Europe

Alshaya Starbucks stores in Russia were closed in compliance with the American coffee company’s decision to pull out after the invasion of Ukraine.

Now AlShaya is looking to Central and Eastern Europe, opening a third Victoria’s Secret in Bucharest, Romania and other franchises in the Czech Republic, Poland, Azerbaijan and Kazakhstan.

Haddon said Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan are future prospects in the group.

Geopolitical turmoil is something the retail industry will have to navigate as it recovers from Covid-19, but the Middle East is resilient, with a growing population and growth in other sectors such as tourism continuing to offer opportunities, he noted.