The world over, the retail sector has had to re-evaluate its strategy to maintain profit margins and retain customers in the face of economic pressure. Within Oman, the Enhance Oman name is long established for delivering retail excellence that appeals to the local population.
Enhance is the leading provider of Brand Distribution and Retail Management Solutions in Oman with expanding management responsibilities in other GCC Markets. Brand Solutions provides Distribution and Sales Management Solutions for global, international and regional Business Partners such as Reckitt Benckiser, Weetabix, Colgate Palmolive, California Garden, British American Tobacco, Ooredoo and many others, whilst Retail Solutions manages the majority of Ahlain forecourt convenience stores, in addition to Noor Shopping supermarkets and O-mart neighbourhood convenience stores, both brands created in-house. In addition, Retail Solutions serves hotels and ships through the Food Service Division. Furthermore, Enhance Retail Solutions also operates a number of franchises in Oman, such as its joint venture with Dunkin’ Donuts and Sweet Factory.
Ahmad Abbas is the General Manager of Retail Solutions at Enhance Oman, and joined the company back in 2001:
“We essentially have 3 pillars within the company: the first one is focused on the distribution of FMCG products; the second area is the one I am responsible for, Retail Solutions, looking after retail management; while the third area is our support service, responsible for IT, accounting, human resources and logistics. For clarification purposes, Enhance is the trading name of Matrah Cold Stores LLC (MCS) which remains the name of the legal entity.
“The company was established as a partnership between W. J. Towell and Spinneys in November 1967 and commenced activities in 1969 with our first supermarket. After 30 years of successful partnership, the Towell Group acquired the full stake in 1999. Moving down the timeline, in 2008 we re-branded and became ‘Enhance’ to reflect our corporate vision “Making your life better through our products and services”,” he describes.
Whilst the retail operations are primarily concentrated on Oman at present, Abbas states that the wider group is established elsewhere within the UAE and Kuwait on its distribution side and that retail could also expand its geographical footprint in the coming years.
He indicates that there is roughly an even revenue split between the company’s distribution and retail arms, although this can fluctuate.
“We are the number one company in Oman when it comes to the number (close to 100) and we are the biggest operator of single retail outlets,” he confirms. “We are quite balanced across the distribution and retail businesses, and the opening of new stores contributes to the increase in turnover.”
The latest addition to Enhance’s portfolio has been the introduction of the Noor Shopping supermarket brand, a new chain that has sought to aggressively open new stores and expand outside of the Muscat region.
“We currently operate 10 stores, having launched this concept at the end of 2012, although Noor Shopping initially started as O-Mart neighbourhood convenience stores. We found that the concept of convenience stores within neighbourhoods was challenged by premium pricing and had to adjust accordingly; this is still a work in progress but the signs are encouraging and this type of supermarket is the fastest growing in the MENA region.”
“We are finding that going to areas of residence, people will visit our outlets to top up on their shopping with fresh foods particularly. The trends indicate that consumers are moving away from monthly bulk shopping towards more frequent top up shopping. Whilst we are not as cheap as hyper markets, we are not as expensive as convenience stores, providing the perfect shopping solution for consumer.”
Price point is of course a critical issue for any retailer, with Abbas stating that the average spend of an Omani is quite even across the country. Operationally, he says that the past 4 years have put a premium on accurate forecasting and pricing:
“One of the biggest challenges has been to balance periodic salary increases in line with the cost of products and we have found that the best way to overcome this has been to look at the overheads and employee productivity – and to improve efficiency through technology.
“Commercially we have had to take into account the unique nature of Oman; it is a very geographically spread country with limited population density away from the big cities. That means that in order to reach more consumers, we have had to go out to less populated areas.”
“Our convenience stores operate approximately 4,000 sku’s which is the widest range in Oman and we feel that offering variety for the consumer adds value. We offer over 10,000 products in our new super markets.
“Everything is locally sourced although we are now starting to look at importing directly in certain categories. Really the only option you have is to source from local distributors without the scale of products. Price becomes a factor and you have to look at the most efficient ways and often it is better to work with local distributors on the branded products.”
The company has also put a premium on its staff, with Abbas indicating that at the moment there are around 500 employees in the Retail division, with roughly 80 per cent Omanis – one of the highest rates in the country in the FMCG retail sector.
“Training plays an important role and from the outset I felt that it was important to communicate to employees a clear career development path at the recruitment stage.
“We carry out our own internal training but also make use of the government funded initiatives available. Enhance Oman also runs its own training centre in the Muscat area.”
Keeping tabs on so many retail outlets is quite a challenge, but Abbas says that each region of Oman has been appointed with an Area Executive who reports in to head office and is fully accountable for each store’s performance.
In the 14 years since Abbas arrived in Oman, he says he has seen plenty of evolution in the retail sector: “There is certainly more competition nowadays and the country has come a long way in terms of hyper markets, supermarkets and convenience stores. Plenty of businesses are seeing the opportunities that Oman represents and they all want a piece of the pie.”
Of course Enhance Retail Solutions Oman has the added advantages of being local and having a tried and tested pedigree. The next phase is to improve operational efficiency, as Abbas confirms, looking to the future:
“We are working on various technology elements right now as we must, especially with the world moving more towards mobile phones and applications, all of which we can do here in Oman. There are plenty of initiatives we can adopt from retail business around the world and concepts like loyalty programmes are in the pipeline.
“There is decreased liquidity in the markets but we continue to grow as per the strategy. We are always looking for new ventures like neighbouring markets (something our distribution pillar is already engaged in) and we want to keep developing our local work force.
“We will continue to introduce new products; the route of importing will be important in the future. The next 18 months will be very bright and we will be opening a lot of new stores and our aim is to become the largest supermarket chain in Oman before the end of 2017,” he concludes.