Al Othaim’s market share surges in steady retail sector: CEO

Muaffaq Mubarah, CEO of Abdullah Al Othaim Markets Co.

Abdullah Al Othaim Markets Co. recorded a significant increase in its retail market share during Q1 2025, driven by geographic expansion and improvements in the shopping experience, CEO Muaffaq Mubarah told Argaam.

Mubarah added that key indicators confirm the company’s ongoing efforts to reinforce its competitive position in the Saudi market.

The Saudi retail sector is witnessing intense competition, which pushes all companies to deliver their best in order to maintain market share. Accordingly, Al Othaim is working to strengthen its competitive position through strategic expansion, digital transformation, and supply chain efficiency, with a primary focus on enhancing the customer experience.

The sector is not experiencing a slowdown as some may believe but rather showing stable performance amid noticeable shifts in consumer behavior, the CEO said. There is an increasing shift toward dining out and utilizing food services outside the home, which has relatively impacted the volume of traditional household purchases.

Mubarah pointed out that these shifts represent a redistribution of spending patterns rather than a decline in overall expenditure, which requires retail companies to adapt by diversifying their offerings and providing flexible solutions that align with modern lifestyles.

Intense competition and ongoing promotional campaigns impacted profit margins, but they are essential for maintaining market share and boosting sales.

The CEO noted that companies focusing on operational efficiency, digital transformation, and customer experience will be better positioned to achieve growth and stability.

Mubarah explained that Al Othaim’s revenue growth was backed by improved commercial performance across branches, successful product diversification strategies, enhanced marketing effectiveness, and the expansion of e-commerce and rapid delivery services, along with increased efficiency in the supply chain.

Additionally, a rise in sales was driven by strong performance during the Shaaban and Ramadan seasons, well-planned promotional campaigns, and expansion into key areas, which supported continued commercial momentum and improved demand outside peak periods.

Also, the company’s customer base grew by 8%, reflecting sustained consumer trust and further reinforcing Al Othaim’s position in the local market.

By the end of Q1 2025, Al Othaim’s operated around 411 branches in Saudi Arabia and 59 branches in Egypt, reflecting continued investment in infrastructure to meet future growth demands. Riyadh, Eastern Province, and Makkah were among the top revenue contributors on higher population density and stronger consumer spending.

The CEO expects a continued improvement in operational performance in Q2 2025, backed by planned expansion, enhanced operational efficiency, and upcoming shopping seasons.

Al Othaim places advanced digital solutions at the core of its future priorities, including the utilization of AI technologies for price management, cost control, and demand forecasting, aimed at boosting profitability and delivering added value to shareholders.

The Saudi retailer aims to extend its investment in enhancing the customer experience, alongside diversifying operating models such as "Othaim Express" for residential neighborhoods and "Othaim Cash & Carry", as part of a strategy focused on delivering an integrated shopping experience and meeting the needs of various market segments.

According to Argaam data, Al Othaim posted a 34% drop in net profit to SAR 76.4 million in Q1 2025, compared to SAR 115.5 million in Q1 2024.