Leading Saudi Arabian retailer Alhokair has reported stable revenues of SAR3.08 billion ($820 million) for the first half of the year, ending September 30, following a performance boost in international retail.
Fawaz Abdulaziz Al Hokair and Company is the leading franchise retailer in the kingdom and the only listed business of its type in the Middle East, trading approximately 1,659 stores across 11 countries.
While announcing the business’ results, Alhokair said its revenue was broadly flat at $820 million, owing to the decline in retail sales in KSA, which has greatly offset the gains of the international portfolio.
Online sales remained a key focal area, seeing a 14 per cent YoY growth in H1-FY23, to SAR132 million, the company said.
E-commerce in the kingdom has also been rising in popularity, with reports indicating market growth at a compound annual growth rate of more than 15 per cent by 2026.
Alhokair is committed to the digital aspect as a key pillar of its strategy to upgrade its operations and maintain its position as the partner of choice for leading brands. It also seeks to provide a unique omnichannel experience to its wide consumer audience.
The Saudi retailer recorded revenues of SAR1.37 billion in its Q2-FY23 performance, slightly up from SAR1.36 billion in Q2. This was influenced by the growth of both F&B and international retail sales, which increased YoY by 5 per cent and 9 per cent, respectively.
According to Alhokair, international retail operations fared well during the period, with revenues of SAR285 million, up 9 per cent YoY in Q2-FY23, as well as SAR552 million in H1-FY23, up 15 per cent YoY. International retail sales rose by 8 per cent YoY in LFL terms for Q2-FY23.
Its international performance thrived despite fluctuations in currency, driven by the positive momentum from steady improvement in the performance of CIS countries and Jordan. This is expected to continue, despite the weaker performance from Egypt.
Alhokair is focusing on expanding its presence in select strategic growth markets.
Ahmed Belbesy, the company’s chief financial officer, told Trade Arabia, “We have successfully maintained a positive revenue trend, supported by our F&B and international segments, which continued to deliver solid results during this period.
“By persistently optimizing our operations, we will focus on delivering improvements in profitability and added value for our shareholders.”
Mr Belbesy believes is confident the company can overcome market challenges.
“In KSA, the secular change in consumer spending habits has been further impacted by a return of summer travel following a COVID-impacted two-year period, and the return and rise of pre-pandemic activities,” he told Trade Arabia.
The business remains determined to expanding its growth segments both in Saudi Arabia and internationally, through on-boarding new brands and enlarging its digital footprint.
In a statement to the Saudi Stock Exchange (Tadawul), Alhokair said its overall performance was “muted” because there was a “slowdown in the domestic market”.
“[Domestic revenues were down] as a result of seasonality and inflationary pressures, which [were] impacting consumers’ purchasing power and discretionary spending,” Alhokair said.
