Spinneys deepens Saudi push with larger stake

Spinneys will raise its ownership of its Saudi Arabian subsidiary to 70 per cent by acquiring an additional 20 per cent stake from Abdul Mohsen AbdulAziz Al Hokair Holding Group for SAR18 million.

The Dubai-listed premium grocery retailer said the transaction covers shares in Al-Ma’kulat Al-Fakhirah for Food Products, known as Spinneys KSA. Completion remains subject to regulatory approvals, including clearance from Saudi Arabia’s General Authority for Competition.

Spinneys currently owns half of the subsidiary, which was established in 2022 as a joint venture with Al Hokair to operate supermarkets, convenience stores and other grocery outlets under the Spinneys brand. The purchase will leave Al Hokair with a 30 per cent interest.

The deal gives Spinneys a stronger economic position in one of its main expansion markets while preserving its relationship with a well-established local partner. The company has managed the Saudi business since its formation and already consolidates the subsidiary in its financial statements under international accounting rules.

Chief executive Sunil Kumar said Saudi Arabia remained one of the group’s most important growth markets, citing the development of its premium grocery segment and a young, expanding and increasingly affluent population.

Spinneys entered the kingdom in 2024 with the opening of its first supermarket in Riyadh. The flagship outlet at La Strada Yard covered more than 43,000 square feet and introduced the group’s fresh-food-focused retail model to a market dominated by large domestic operators and regional supermarket chains.

The company has since expanded its presence in Riyadh and Jeddah, concentrating on neighbourhoods and shopping destinations with higher household spending. Its pipeline includes stores at Cenomi Centers properties, including Nakheel Mall in Riyadh and U-Walk Jeddah.

Spinneys has previously outlined plans to operate as many as 12 Saudi stores by 2028. The strategy is focused on Riyadh and Jeddah, where the number of affluent consumers is projected to expand faster than the wider grocery market.

The increased shareholding gives the retailer greater exposure to future earnings from those openings. It could also simplify investment decisions as the subsidiary adds sites, builds supply relationships and develops online delivery services.

Saudi Arabia offers a much larger addressable market than the UAE and Oman, where Spinneys has built its core regional business. Its population exceeds 35 million, while economic diversification, rising employment among women and the growth of residential developments are reshaping consumer spending patterns.

Premium grocery retailers are seeking to benefit from demand for imported products, fresh produce, prepared meals, private-label ranges and higher-quality shopping experiences. Growth is also being supported by expanding digital payment use and the popularity of home delivery platforms.

The market, however, remains highly competitive. Spinneys faces established operators including Panda Retail, BinDawood, Danube, Tamimi Markets, Carrefour and Lulu Hypermarket. Several competitors have broad store networks, strong local procurement systems and well-developed loyalty programmes.

Spinneys is positioning itself differently by targeting customers willing to pay more for product quality, service and convenience. Its model relies heavily on fresh food, bakery items, meat, seafood and own-brand goods, categories that can generate stronger margins but require tight control over sourcing, storage and wastage.

The group has also been increasing private-label penetration, helping it differentiate its offer and reduce direct price comparisons with rival chains. Private-label goods accounted for more than 45 per cent of retail revenue in 2025, reflecting their importance to its profitability and customer proposition.

Spinneys reported revenue of about AED3.6 billion for 2025, an annual increase of more than 13 per cent. Profit after tax rose by roughly 14.5 per cent to AED332 million as new stores, higher sales volumes and private-label products supported growth.

Its network reached 90 stores at the end of that year after 13 openings. Further additions lifted the footprint to about 93 outlets across the Gulf, including supermarkets operating under the Spinneys and Waitrose banners.

The Saudi investment forms part of a broader regional expansion strategy following the company’s listing on the Dubai Financial Market in May 2024. The initial public offering raised AED1.38 billion through the sale of a 25 per cent stake and valued the business at about AED5.5 billion at the offer price.