Al Jazira Supermarkets: Defining Brand Strength and Distribution

March 4, 2014 in Retail

As populations and infrastructure grow across the Gulf region, so too does competition in all manner of industries. With retail, where international economic uncertainty puts additional stress on consumer spending, the onus is even more entrenched to be adaptable.

In Bahrain, even the most established retail names are reassessing not only their costs but also the way they serve customers. At Al Jazira Supermarkets that focus has resulted in a major rebranding exercise which is currently underway.

Al Jazira was established back in 1965, at a time when Bahrain did not have strong competition in the supermarket sector,” states Hadi Dawani, Marketing Manager. “My grandfather and his brothers opened a small supermarket in Adliya and made an immediate impact as they began to import some of the best known brands from around the world, which had not previously been available in Bahrain.

AlJazira (2)They kept changing brands and the business evolved and grew – almost from the start, Al Jazira was able to develop a strong distribution arm, as other supermarkets wanted to stock these brands on their shelves – and that is really where the company still gets its strength today.”

Al Jazira remains a key distributor of global brands to this day, and has grown to 4 supermarkets in addition to 2 large warehouses. The business is headquartered in Manama where the largest supermarket exists.

Among the strategic agreements in place, the company supplies the likes of: Heinz, Monster Energy, L’Oreal, McVities, Pinar, Hero, Mazola, Volvic, Suntop, Suncola, Sunquick, Bahlsens, Sara Lee, John West, Amoy, Homepride, Nestle Purina, Nectaflor, Al Kharama, Naif, Kruger, India Star Rice, Lurpak and Scott tissues.

The distribution side of the business has changed considerably since we first started and there is much greater reliance on technology now to maintain stock control,” Dawani affirms. “Distribution always makes money because we have the big brands and for example, every supermarket in Bahrain wants to stock L’Oreal or Heinz Tomato Ketchup.

This means effectively that we have 2 types of clientele: our supermarket customers but also the other supermarkets too, so we are dealing with everyone and we know our competition. We stock over 30 major brands and roughly 20 per cent of our inventory is imported.”

The company website speaks of its “state-of-the-art logistics facility based in Tubli – which is the nerve centre for our extensive distribution network. With huge capacity for the storage of dry, frozen and chilled products Tubli can cater for the needs of our own supermarkets and agencies with ease, as well as serving every corner of the Kingdom of Bahrain.”

That service was further enhanced last year when the company invested in new software provided by Fujitsu, which has integrated all stock control across the Al Jazira network – including some 35,000 plus sku’s.

We changed our IT software in 2013 and the next step is to add a loyalty scheme for our supermarket customers,” states Dawani.

“We introduced the software in stages and it took us 6 months just to transfer all of the sku data across. Our people also had to get used to the change and some of them had worked with old systems for 30 or 40 years.

We had to train our people and they are now starting to learn about the benefits of the new system which provides faster, more accurate data on all areas of the business and helps us to improve our forecasting. Now we can know our strengths and weaknesses and what is selling well and what is not selling so well,” he explains.

Stock control is of course of paramount importance, particularly for a company like Al Jazira; “We carry a bigger range of items than any other supermarket and one of the advantages we have derived from also distributing is that we can offer shoppers lower prices as we purchase supplies in bulk.

Our distribution activities meant that we were always cheaper than Waitrose and other competitors whilst offering the same quality products. However, stock control also affects margins and our forecasting is crucial to the business, none more so than around Ramadan.

We will typically double or in some cases even treble stock in the month leading up to Ramadan. You have to be ready for the rush of business as every household gets ready for bulk purchases.”

Al Jazira Group is clearly getting its figures right and continues to enjoy growth, adding 20 to 30 new employees to its 500 plus existing workforce every year and with plans to open a new store, the first opening in over 10 years, as Dawani outlines:

We have assessed the present economic climate and the performance of our group and we are planning to open a new store in Manama later this year. The main reasons why we are doing this now are that we have a fully stable business with strong management – but we are also in the process of changing the look and feel of Al Jazira across all of our supermarkets.

This will incorporate a new logo and new colours, while the appearance of the supermarkets will also change. Once the rebranding is completed we will be in a position to open stores all over the country.

The new look is inspired by our customers’ expectations and perceptions of Al Jazira and we want them to feel the experience of shopping in Al Jazira is enjoyable but also that they can purchase organic and healthy products with us.

Dawani indicates that the rebranding in progressing well and that a big marketing campaign is likely to ensue once this is completed, with budget saved for a big drive later in the year when the new logo is launched.

In the meantime, the company’s latest addition has been the opening of its first Al Jazira Home Store in December.  The store is located within the existing Mahooz store and was officially opened by Industry and Commerce Minister Dr. Hassan Fakhro.

During his tour in the shop, the minister hailed the excellent standard of the furniture and accessories that will satisfy different tastes and ideas. At the same time, the minister praised the efforts made by the private sectors and companies in Bahrain and always keen to add new options for shoppers.

A lot of our customers buy lots of the types of items we are selling and we thought about it and felt we could test the market given we had space available within our Mahooz store. The Home Store has been trading for 2 months now and sales have been good so we might in time look to set up an online shop for this business,” confirms Dawani.

Whilst he says that internet sales have been slow to take3 off in Bahrain – with online bank card use restricted, Dawani is excited by the prospect of closer interaction with customers to better understand their needs and concerns.

He remains optimistic for the future: “Our aim is to have a stronger brand and we need to ensure customers are happy with the new brand and our customer service. Our big goal for the coming year is to make our supermarkets look nicer and neater and to focus on the whole customer shopping experience,” he concludes.