Home / Business / Online food sales are “rising” in the Middle East, the trend may continue

Online food sales are “rising” in the Middle East, the trend may continue

Online demand for groceries has seen a “fantastic surge” in the Middle East during the coronavirus pandemic, and the trend may be here to stay, a United Arab Emirates-based retailer told CNBC this week.

Supermarket operator Carrefour’s online orders nailed 917% in Saudi Arabia from January to June this year, while the United Arab Emirates and Egypt saw jumps of 257% and 747% respectively during the same period.

“Online has been … rising since Covid started, even though we have grown in the past,”

; said Alain Bejjani, CEO of retail giant Majid Al Futtaim. The company is the exclusive franchisee for Carrefour in the Middle East and Africa.

“It has been a fantastically powerful force across the region,” he told CNBC’s “Capital Connection” on Tuesday.

This trend may be longer than the pandemic, Bejjani said, citing a survey conducted by consulting firm McKinsey.

The survey results showed that food deliveries increased by 31% of users in the United Arab Emirates, with 66% saying they intend to continue using the service after the end of the health crisis. Similar statistics were reported for Saudi Arabia, according to McKinsey.

A supplier is waiting for customers at the Dubai Spice Souk on July 20, 2020 in Dubai, United Arab Emirates.

Francois Nel | Getty Images News | Getty Images

“We are seeing about … 200% to 220% increase in the number of online customers on average throughout the region, and this is something that is extremely promising,” Bejjani said.

In addition to supermarkets, he said the recovery has been “better than expected” across the region. There has been a “steady return” of consumers and an improvement since the beginning of June, although shopping centers still see fewer customers compared to a year ago. Shoppers are also “much more value conscious” now.

Cinemas, hotels and the aviation industry are probably the slowest to recover, he said.

More than 18.1 million people have been infected with coronavirus and at least 691,738 have died, according to data compiled by Johns Hopkins University. In the region, Iran, Turkey and Saudi Arabia have been hit hardest.

Asked when activity could return to pre-pandemic levels, Bejjani said it would likely only happen when a vaccine is available, possibly during the first half of 2021.

“When it comes to business effects, I think 2022 will hopefully be a year that will be similar to where we were in 2019,” he said.

He added that once we get past the pandemic or learn to live with it, the “big issue” will be financial security and consumer confidence.

“At the end of the day, this is a crisis of confidence,” he said. “For people to come back and consume, they have to have faith, we have to have much better consumer confidence.”

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