Investment Highlights

Lulu Retail operates in a large and growing addressable market of grocery retail in the GCC, which is projected to reach c. USD 101 billion by 2028, representing a 4.2% CAGR between 2023-2028, according to Euromonitor. This growth is underpinned by strong macroeconomic tailwinds in the GCC, which are projected to outpace global averages in 2023-2028. 

The implementation of major transformational agendas in Lulu’s markets, including Saudi Vision 2030 in the KSA and Dubai 2040 Urban Master Plan in the UAE, which aim to establish a diversified and resilient economy, attract more people to these countries, improve the overall business environment in the region and develop quality, reliable and sustainable infrastructure, contributing to the projected growth in the GCC.  

Lulu is the largest pan-GCC retailer by selling space, sales and number of stores in 2023, holding 13.5% market share of the GCC modern offline grocery market. Lulu’s total selling space of c. 1.3 million square meters in 2023 was c. 3x. larger than the average selling space of its listed peers in the GCC. 

Lulu’s revenue of USD 7.3 billion was c.4x higher than the average sales of its listed peers in the GCC, allowing it to benefit from economies of scale, stronger negotiating power with suppliers and enhanced brand recognition. 

Lulu utilises its extensive local know-how to cater to diverse local customer demands from its base of over 200k active SKUs (with a total of c.  650k SKUs), sourced from 85 countries. Existing arrangements with local governments and affiliated organisations and entities support Lulu’s ties with local communities and increase the Group’s sales volume.

Lulu has a highly integrated supply chain based on efficient sourcing, underpinned by global sourcing offices and in-house logistics and supported by active monitoring of customer trends to continuously enhance product selection. 

Lulu’s network of stores and online channel allow for multiple customer touchpoints with a diversified product offering and high-quality service. Lulu has a flexible approach with respect to potential areas for expansion, which are not limited to large urban areas, but also include smaller suburban and rural areas in Lulu’s markets. 

Lulu strives to deliver exceptional customer service to its customers across all backgrounds by focusing on providing personalised customer engagement alongside being well-integrated in its local communities, having hosted over 80 diverse special events or festivals in the UAE in 2023 and approximately 750 events and promotions across the GCC. 

Lulu’s value proposition emphasises a well-balanced and diverse product range comprised of packaged goods (54% of Group sales by value in 2023); fresh food (21% of Group sales by value in 2023); electrical goods (13% of Group sales by value in 2023) and lifestyle products (12% of Group sales by value in 2023). 

Lulu’s differentiated and high-quality Private Label products account for c.29% of total sales, as at H1 2024, which carries a higher margin compared to branded products. 

Lulu launched its customer loyalty Happiness Programme in the UAE in 2023, with a subsequent launch in Qatar in 2024, with  a total of c.2.4 million registered users in the UAE and Qatar as at 31 August 2024. The average basket size for registered users in the UAE is c. 1.7x higher than that of customers not registered in the loyalty programme, based on the June 2024 monthly information.

Lulu has an extensive global sourcing network, bringing products from 85 countries to each of its markets. This is supported by 19 on-the-ground sourcing offices, with local sourcing capabilities enabling Lulu to directly monitor and ensure the quality and standards of products are maintained throughout the supply chain. 

Lulu maintains strong long-term relationships with many of its key suppliers, spanning over 20 years on average. Direct access to new quality products and innovations, full logistical control over sourcing operations and a broader and more diverse selection of products are all benefits of Lulu’s sourcing network. 

Lulu’s logistics and distribution infrastructure is well-positioned to support its future growth. Lulu operates 21 distribution centres in the GCC, with a total inventory space of 430,000 sq.m. which provides sufficient capacity to support Lulu’s current store rollout plans, alongside an in-house fleet of c.1,400 vehicles to transport products from the distribution centres to stores.

Lulu has a track record of strong topline growth having delivered H1 2024 revenue of USD 3.9 billion, up 5.6% year-on-year, and full-year 2023 revenue of USD 7.3 billion, up 5.6% year-on-year. The year-on-year increase in revenue was primarily driven by sales growth from existing stores and further expansion of the Group’s store network, as well as growth from its online channel. 

EBITDA in H1 2024 totalled USD 391 million, up 4.3% year-on-year. EBITDA for 2023 was USD 753 million, up 7.2% year-on-year. The year-on-year increase in EBITDA was primarily driven by an increase in gross profit and other operating income, including display income and opening contribution for new stores. 

High cash flow generation in 2023 was driven by robust profitability, supporting the Group’s future growth.

Lulu is led by a well-tenured senior management team, with a combined experience of over 140 years and an average of over 36 years of experience at Lulu. 

Lulu’s management team is led by the Chief Executive Officer, Mr. Saifuddin Rupawala, who joined Lulu Group in 1982 and has over 41 years of experience, who, in turn is supported by the Chief Financial Officer, the Chief Operating & Strategy Officer and Executive Director for Global Operations, who have 25, 37 and 41 years of experience at the Group, respectively. 

Lulu is further supported by the founding shareholder and Chairperson, Mr. Yusuff Ali,  who is committed to the Group’s ongoing success. 

In 2020, ADQ, a wholly-owned state development holding company established by the Government of Abu Dhabi to promote the national economy, invested in the Group and indirectly holds a 20% stake in the Group.