BinDawood Holding’s 2021 profit hit by high inventory; 100 stores eyed by 2024: CEO

Ahmad Abdulrazzaq BinDawood, CEO

BinDawood Holding Co.’s 2021 net profit was weighed down by the high inventory in 2020, as the company aimed to meet future demand amid any surprising decision on closures, CEO Ahmad BinDawood told Argaam in an exclusive. 

The company made a strategic decision on reducing inventory by 2022 to ensure positive and robust performance, while limiting the challenges to 2021.

BinDawood Holding’s lower sales led to a decline in profitability, amid the challenges faced by the “BinDawood” brand with respect to Hajj and Umrah seasons. In addition, COVID-19 precautionary measures were applied by “Danube” brand to avoid any violations or branch closures, the top executive explained, adding that there were no promotional campaigns or advertisements.

Elsewhere, BinDawood added that the total number of the grocery stores reached 78 in the fourth quarter of 2021, including 51 hypermarkets, and 27 supermarkets. He expects to have 100 branches by the end of 2024.

Moreover, the Kingdom’s decision to allow travel and Umrah at full capacity helped sales to rise, however, they have not yet reached to the 2019 levels.

“BinDawood” brand sales recorded a drop of SAR 500 million to SAR 1.209 billion in 2021, from SAR 1.733 billion in 2019.

Meanwhile, “Danube” brand sales grew by SAR 50 million to SAR 3.173 billion in 2021, from SAR 3.110 billion in 2019, despite the lack of promotional campaigns and new openings.

The top executive expects the company's performance to improve, due to the easing of the precautionary measures and the launch of marketing campaigns to attract more shoppers, as well as the resumption of international flights.

There are challenges related to supply chains and Ukraine-Russia crisis and their impact on inflation, the CEO said, indicating that the company is ready for any challenges.

The Saudi grocery retailer’s 2021 net profit fell by 46% to SAR 240.6 million, from SAR 447.7 million a year earlier.