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 retail executive told CNBC this week.
Supermarket operator Carrefour’s online orders spiked by 917% in Saudi Arabia from January to June this year, while the United Arab Emirates and Egypt saw jumps of 257% and 747% respectively over the same period.
“Online has been … soaring since the start of Covid, although we have been growing before,” said Alain Bejjani, CEO of retail giant Majid Al Futtaim. The company is the exclusive franchisee for Carrefour in the Middle East and Africa.
“There’s been a fantastic surge across the region,” he told CNBC’s “Capital Connection” on Tuesday.
That trend may last beyond the pandemic, Bejjani said, citing a survey conducted by consulting company McKinsey.
Survey results showed that grocery delivery saw a 31% increase in users in the UAE, with 66% saying they intend to continue using the service after the health crisis ends. Similar statistics were reported for Saudi Arabia, according to McKinsey.
A vendor waits for customers at Dubai Spice Souk on July 20, 2020 in Dubai, United Arab Emirates.
Francois Nel | Getty Images News | Getty Images
“We’re seeing about … 200% to 220% increase in the number of online customers on average across the region, and this is something that’s extremely promising,” Bejjani said.
Beyond supermarkets, he said the recovery has been “better than expected” across the region. There’s been a “steady return” of consumers and an improvement since early June, though malls are still seeing fewer customers compared to a year ago. Shoppers are also “much more value-conscious” now.
Cinemas, hotels and the aviation industry are likely to be the slowest to recover, he said.
More than 18.1 million people have been infected by the 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 the hardest hit.
Asked when activity might return to pre-pandemic levels, Bejjani said that is likely to happen only when a vaccine is available, possibly in the first half of 2021.
“When it gets to business impact, I think 2022, hopefully, will 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 economic security and consumer confidence.
“At the end of the day, this is a crisis of trust,” he said. “For people to come back and consume, they need to have faith, we need to have a consumer confidence level that’s at a much better rate.”