Savola CEO: Competition, discount stores weigh on retail profits

Sameh Hassan, CEO of Savola Group

Sameh Hassan, CEO of Savola Group, said the retail segment was the group’s weakest performer in Q3 2026, amid changes in the Saudi market that have intensified competition and prompted companies to increase investments to defend their market shares.

In an interview with Asharq, Hassan said that despite the decline in retail profitability, Panda maintained its sales at SAR 8.5 billion in the first nine months of 2026 and reduced operating expenses by 4%.

He added that Panda maintained its 23% market share in the supermarket and hypermarket segment, while expanding its digital channels. Its e-commerce market share rose to between 6% and 6.5%, with online sales growing 150%.

Hassan said Panda is shifting its focus towards improving the productivity of existing stores and strengthening customer loyalty to the brand, rather than continuing to expand its store network.

The company is nearing the completion of its store expansion program, with its priorities now centered on increasing customer visits and average basket value, alongside developing its e-commerce business and loyalty program.

Customer transactions exceeded 95 million in 9M 2026, compared with around 88 million in 9M 2025. The loyalty program now accounts for approximately 65% of total sales.

On the cost front, Hassan said the group faced higher shipping, land transportation, and insurance costs due to regional conditions. However, it managed to absorb most of these increases during the first nine months through measures aimed at reducing operating expenses.

He noted that the group raised prices on certain products in selected markets, but kept the increases to a minimum.

Regarding the group's financial position, Hassan said net debt declined to around SAR 217 million from SAR 600 million last year. "This may be the lowest level in Savola's history," he said, adding that free cash flow reached SAR 521 million.

According to Argaam data, Savola Group's net profit fell 22% to SAR 529.55 million in 9M 2026, compared with SAR 680.42 million in 9M 2025.

The group reported a net profit of SAR 128.49 million in Q3 2026.