What is the composition of Lulu, and what are its main areas of focus?
Lulu Group International is a 70-year-old Indian family-owned company. In Qatar, we have been operating for 19 years, where we have had eight hypermarkets. We mainly deal with food, non-food, and daily essential items. The average area of our stores is 20,000sqm. Our concept is well-accepted here, because we have been able to maintain prices and provide quality. Lulu also has a great deal of backward integration. We source products from around the world. We have export distribution centers in 24 countries including the UK, the US, and Spain to make sure that food security is maintained all times. We are now trying to add another 10 outlets in the next year, a massive expansion. It is all pent-up demand, and we will meet it. There are many changes in the Qatar market. Concepts like ours, which are more than retail, have potential here. The economy and activities are expanding, and new cities are being built, as are retail properties. We will cover practically every location in Qatar. We are building a warehouse now that should be operational in 3Q2020, where we will have strategic six-month reserves for all basic commodities.
Do you also produce locally?
We will start producing our own label of food products. We have already started this process by commissioning about 15 items from local producers who matched our quality and standards. These will be products such as processed meat, nuts, and canned foods. Our next stage will be to export them to other countries. We are ensuring we have an excellent export ecosystem here and a favorable tax structure. Qatar also has great trade treaties with other countries. We will look for potential markets in the GCC like Oman and Kuwait, and perhaps Iraq, India, and Bangladesh.
How do you assess the potential of local farms to ensure food security?
Food security started three or four years before the blockade. We are doing a pioneer farm-to-store program. We partner closely with farmers. We work with their production planning and share our seasonality and store traffic. We harvest more on certain days and make sure everything they harvest reaches our store in less than two hours. We also have buyback programs and algorithms that can predict demand, so farmers can plan accordingly. Farms have been increasingly significantly. Local capacities have improved considerably.
How are you adapting new technologies in order to enhance efficiency?
Our delivery chain is fully under our control. Because we are dealing with sensitive products, we do not rely on typical third-party deliveries. We have specially designed trucks that are highly controlled, with three chambers with different temperature controls, as well as tracking devices. We do not only deliver products to people but we deliver them safely. We have around six trucks now and may double that number in six months, as we will cover more areas. We are also in the process of developing a black store, or a store that is not open to customers. It is like a supermarket that will have customers' real-time numbers, logistics, and data. They can shop naturally, we pick it up, and we deliver it to them. We will also incorporate predictive analytics, like telling customers they forgot to buy milk.
Where do you identify the potentials in upcoming years?
Hospitality is also in our group, but we do not have it in Qatar. We will stick to retail, though we will have multiple formats and increase our channels. The biggest priority now is to open the logistics center in 2020. The other priority is to open all our pending stores, including in Lusail and the Pearl, by 1Q2020. We will also look at the demographics of people coming to the World Cup and make sure they are taken care of.