Oman: Retail opens up

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The recent opening of two hypermarkets in Oman, adding more than 33,000 sq metres of shopping space, has been a welcome boost to the retail sector, alongside new moves to protect the rights of consumers.

On February 28, the LuLu Salalah retail chain opened a three-level outlet next to the Salalah Airport that will be the country’s largest. The structure has more than 30,000 sq metres of retail space and features modern facilities including an extended food court, a children’s amusement arcade, several international brand shops, a department store and a supermarket.

LuLu is the largest hypermarket chain in the GCC, with local media reporting in February that it has a regional market share of around 35% and combined footfall across its stores of more than 425,000 people per day.

“We will be opening more hypermarkets in both existing as well as new markets in Oman and other GCC countries within the next few months,” LuLu Group’s managing director, Yusuffali MA, commented during the opening ceremonies.

The construction firm that built the new store, Teejan, is currently working on a new LuLu hypermarket in Buraimi, Oman, near the border with the UAE, which will be the biggest in the GCC, with an area of 31,000 sq metres and a total project value of OR10m ($25.9m).

The LuLu opening follows the launch of another three-level outlet, the Mars Hypermarket, in the capital, Muscat, with a total area of approximately 3700 sq metres. Mars also plans to open outlets in additional cities by 2012. Company officials have said that a store in Barka is in its final stages. “Mars Hypermarket is commencing its business from Muscat’s thickly populated residential and commercial area. This is going to be their sixth retail outlet in the sultanate and eighth in the GCC,” VT Vinod, the managing director, told local media.

Other retail developments in Oman include the opening of several new outlets at the Muscat City Centre. Marks & Spencer, plus three other fashion retailers, are adding the final touches to new branches. In addition, international bank HSBC has opened its largest customer service outlet in the same shopping centre.

In a move that should buoy the spirits of local shoppers, a royal directive was issued on February 26 to establish an independent authority for consumer protection. Local organisations concerned with consumer rights currently include the Oman Association for Consumer Protection (OACP) and the Consumer Protection Department (CPD) at the Ministry of Commerce.

The OACP is an independent, non-profit, non-governmental organisation founded in 2003. Its areas of activity include protecting consumers against unfair or deceptive practices and educating people about the quality, safety and pricing of goods. The OACP handles complaints from consumers, organises educational conferences, and disseminates brochures and publications.

The CPD is generally responsible for monitoring markets and supervising prices. Last September, there were complaints that traders were manipulating food prices in the days and weeks preceding Ramadan. Specifically, there were allegations that vendors were hoarding products to sell them at inflated prices during the holiday. At a meeting organised by the Oman Chamber of Commerce & Industry, traders and representatives from the CPD met to discuss food prices.

Following the announcement of the royal directive, Jai Savli, vice-president at Galfar Engineering and Contracting, told local media that the establishment of the new independent consumer protection authority was a “bold and much-desired move”, adding, “I trust this will encompass all avenues of consumer interests in terms of prices, quality, availability and promotion related advertising issues.”

In light of the recent increases in food prices – a phenomenon that has affected markets around the world – there have been questions as to whether the proposed authority will be able to investigate this area as well. “One hopes that the new body will have statutory powers to intervene if the consuming public is faced with unjustified price increases of staple foods and other essentials,” Hafidh bin Saif, an engineering consultant, told the Oman Observer.

Consumers in Oman stand to benefit greatly from the recent developments. Not only will more outlets be available, they will also enjoy greater protection from the government. With prospects for the domestic economy looking up in light of the steady recovery in global markets and the recent increase in oil prices, local shoppers should have more money in their pockets to spend as well.

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