Kuwait Food and Drink Report Q1 2009

With a small and static population, Kuwait's mass grocery retail (MGR) sector does not offer very many expansion opportunities, prompting companies based in the country to look elsewhere for growth, as discussed in BMI's recently published Kuwait Food & Drink Report for Q109. Kuwait's MGR outlets are concentrated in and around the capital, Kuwait City, and the government-funded Union of Co-operative Societies (UCCS) stores continue to dominate the sector as they hold the exclusive right to operate stores in residential zones. Total sector sales amounted to an estimated US$1.67bn in 2007, of which 62.1% was accounted for by UCCS's network of co-operatives. Nevertheless, local, private operators have continued to expand in recent years, led by The Sultan Center (TSC).

TSC currently runs a network of 53 stores and is looking to double this number over the next three to five years. In mid-September the company announced its plans to expand its presence in the Lebanese MGR sector following its earlier acquisition of two local retailers in a deal worth US$108mn. Despite the high levels of political risk in Lebanon, TSC is drawn to the country for its strong long-term growth potential, which it will be in a favourable position to exploit. TSC has said that Lebanon's political instability is a burden for the company, but it clearly feels that the potential gains outweigh the risks. The company has plans to set up a wholesale market in the Beirut Souk in the first quarter of 2009, with US$10mn earmarked for interior design and merchandise, as it looks to firmly establish its presence in this burgeoning market.

This move followed the August announcement by Kuwaiti private equity group Global Investment House that it had acquired a 60% stake in the Saudi Arabian retail chain Al Sawani Food and Industrial Supply Company, which has a chain of 550 retail outlets throughout the Middle East. The acquisition was made through the bank's private equity unit Global Buyout Fund. According to a statement by Global, it plans on increasing the capital of Sawani by US$100mn in order to fund a series of acquisitions. The firm, which already controls 11% of the Saudi Arabian retail market, plans to open 150 new stores by acquiring more brands and entering new markets, as it looks to capitalise on the region's retail boom.

While growth in Kuwait's MGR industry will be relatively moderate over the next four or five years, we are nevertheless forecasting growth of 22.7% between 2008 and 2013, with total sales expected to reach US$2.12bn by 2013. This steady growth forecast, which is low in comparison to some other less welldeveloped regional markets, will be the result of increased same-store sales and the entry of two major retail players, Carrefour and Emke. In the long term, BMI expects Kuwait's MGR sector to undergo significant growth, due to the prosperity in the country and its resources and infrastructure. However, with short-term growth opportunities more limited, expansion-hungry firms will continue to look further a field for immediate investments.

• Executive Summary
• Business Environment
• Regional Food & Drink Business Environment Ratings
  • Table: Regional Food & Drink Business Environment Ratings, Q109
• Kuwaits Food & Drink Business Environment Rating
• SWOT Analysis
• Food
• Kuwait Food Industry SWOT
• Drink
• Kuwait Drink Industry SWOT
• Mass Grocery Retail
• Kuwait MGR Industry SWOT
• Macroeconomic Outlook
  • Table: Kuwait Economic Activity
• Food
• Industry Forecast Scenario
• Food Consumption
• Food Consumption Indicators - Historical Data & Forecasts
• Trade
• Kuwait Food, Drink & Tobacco Sectoral Trade Indicators Historical Data & Forecasts (US$mn)
• Industry Developments
• Market Overview
• Agriculture
• Food Production
• Halal Food
• Muslim Populations In Select Countries
• Drink
• Industry Forecast Scenario
• Soft Drinks
• Kuwait Soft Drink Volume Sales (mn litres) Historical Data & Forecasts
• Industry Developments
• Market Overview
• Soft Drinks
• Hot Drinks
• Alcoholic Drinks
• Retail
• Industry Forecast Scenario
• Kuwait Mass Grocery Retail Sales Value by Format - Historical Data & Forecasts (US$bn)
  • Table: Grocery Retail Sales By Format Historical Data And Forecasts
• Industry Developments
• Market Overview
  • Table: Structure Of Kuwait's Mass Grocery Retail Market By Estimated Number Of Outlets
  • Table: Structure Of Kuwait's Mass Grocery Retail Market Sales Value By Format (US$bn)
  • Table: Estimated Annual Average Sales Value Per Outlet, 2007
• Competitive Landscape
• Key Players
• Food And Drink
  • Table: Key Players In Kuwait's Food & Drink Sector, 2007
• Mass Grocery Retail
  • Table: Key Players In Kuwait's Mass Grocery Retail Sector, 2007
• Company Profiles
• Food
• Americana (Kuwait Food Company)
• Kuwait Dairy Corporation
• Drink
• United Beverages Company WLL
• Mass Grocery Retail
• Union of Consumer Co-operative Societies (UCCS)
  • Appendix: Agricultural Commodity Price
• Country Snapshot: Kuwait Demographic Data
• Section 1: Population
  • Table: Demographic Indicators, 2005-2030
  • Table: Rural/Urban Breakdown, 2005-2030
• Section 2: Education And Healthcare
  • Table: Education, 2002-2005
  • Table: Vital Statistics, 2005-2030
• Section 3: Labour Market And Spending Power
  • Table: Employment Indicators, 1997-2006
  • Table: Consumer Expenditure, 2000-2012
• Food & Drink Business Environment Ratings
• Ratings Methodology
• Ratings Overview
• Ratings System
• Indicators
• Limits Of Potential Returns
• Risks To Realisation Of Potential Returns
• Weighting
• Weighting
• BMI Food & Drink Industry Glossary
• Food & Drink
• Mass Grocery Retail
• BMI Food & Drink Forecasting & Sourcing
• How We Generate Our Industry Forecasts
• Sourcing