Spinneys, a leading fresh food retailer in the UAE, has seen its Q1 2024 total revenue grow by 10.9% year-on-year to AED815 million ($222 million).
Record sales were driven by strong like-for-like growth, up 10.0% in the period.
E-commerce sales increased by 10.9% year-on-year, surpassing AED110 million, representing 14% of total revenue.
Gross profit
Gross profit increased by more than 15% year-on-year, with margins expanding by 150bps. Gross Profit margins were robust, reaching 41.2% in Q1 2024, a 150-basis point improvement versus the prior year. This margin expansion was mainly due to the group’s efficient sourcing and supply chain capabilities, alongside its successful private label strategy.
Adjusted EBITDA totalled AED151 million in the first quarter, up 8.7% year-on with an Adjusted EBITDA margin2 of 18.5%, impacted by one-off IPO related costs of AEDc.10 million and pre-store opening expenses in Saudi Arabia. Profit for the period increased by 12.8% year on year to AED75 million, with a net profit margin of 9.2%, a c.20 basis point improvement from the prior year.
Profit for the period increased by 12.8% year on year to AED75 million. Spinneys expects to launch in Riyadh in H1 2024, marking its first-ever expansion into Saudi Arabia.
Strong start
Sunil Kumar, Chief Executive Officer at Spinneys, commented: "We are very pleased with our strong start to 2024, a year which will be Spinneys’ first as a listed company. Our performance in the first quarter underscores the strength of our business model and has been enabled by our relentless pursuit of growth.
“This provides us with a solid foundation to maintain our already strong momentum through the coming periods. With our entry into the highly-attractive Saudi market set to take place in the current quarter, we look forward to continue delivering exceptional value to our customers, achieving sustainable growth and creating long-term shareholder value."
Spinneys saw strong growth in the number of transactions through the first quarter, up 9.5% year-on-year to 802k in Q1 2024.
Average basket size grew by 1.0% year-on-year, supported by continued strength in customer demand.
Online sales and penetration
Spinneys’ e-commerce sales increased by 10.9% year-on- year, surpassing AED110 million for the period. Overall e-commerce sales as a percentage of revenue reached 14% in the period. Spinneys remains committed to developing its digital retail offering to meet evolving consumer preferences and growing demand, having recently completed the soft launch of its Spinneys Swift app to offer a hyperlocal delivery service to customers.
Spinneys opened three new stores in the twelve-month period between Q1 2023 and Q1 2024, with the group operating a total of 75 stores as at the end of March 2024. The three new stores were partially offset by the closure/transfer of two stores. Spinneys remains committed to expanding the number of stores within its portfolio, tapping the significant whitespace opportunity in both the UAE and the Kingdom of Saudi Arabia. La Strada, the first Saudi store in Riyadh, is expected to open in H1 2024.
Spinneys’ growth potential is supported by a number of important drivers, with healthy progress made in several key areas, including:
New stores
New stores pipeline for UAE in 2024: Significant whitespace opportunity in the UAE, with three new stores expected to open in the year.
New stores pipeline for KSA in 2024: La Strada store expected to launch in Saudi Arabia in H1 2024, with three more stores targeted to open by the end of the year.
The Kitchen, by Spinneys: First standalone dining concept expected to launch in H1 2024.
Spinneys Swift: completed the soft launch of Spinneys Swift app to provide a hyperlocal delivery service to customers.--TradeArabia News Service
