5 ways al dukan is changing the face of retail in KSA
Dukan is the pioneer of the Hard Discount Model in Saudi Arabia. Al Dukan’s limited-assortment grocery format has been expanding rapidly for several years in the Kingdom, and making gains in capturing market share with its rock-bottom prices and convenient shopping experience.
Al-Dukan knows the fact that consumers focus on two parameters: cost and quality is the core principle of Al Dukan retailing.
We will examine 5 ways dukan is changing the face of retailing in KSA
1. Limited range
Dukan carries just 550 – 600 SKUs compared with more than 10,000 in a traditional supermarket. The limited range ensures that Dukan can maintain quality and keep prices low.
Dukan is able to maintain good relations with its suppliers since it is buying the same product in the bulk for its all stores in the kingdom.
Dukan maintains the “wonderfully simple” limited assortment discount model “is the key to Dukan’s success ”.
Dukan has recently expanded all over Jeddah region. “What has driven the national expansion is the operating model and that has meant it can offer good quality at low prices, which is the essence of most supermarkets today.”
The model has been used globally by retailers such as Germany’s Aldi, Lidl, Carrefour’s Ed format in France, Danish retailer Netto and Turkey’s BIM. Warehouse clubs including Costco and Sam’s Club operate on similar principles.
2. Private label
Most of dukan products are private label. Dukan is “pioneering in the way it developed its private label ranges in such a big way in KSA”.
Dukan single-handedly has introduced the concept of private label model in Saudi Arabia, Dukan success with private label is leading many other grocers to develop their own ranges.
Part of Dukan ethos is to deliver products of the same or higher quality than the leading brand in whichever market it is operating. The grocer is able to achieve this, as well as delivering low prices, because of its global buying power.
Dukan is so confident in its quality that it money back gurantee on its own PVT assortment
Dukan’s philosophy is not based around the cheapest price but on the value equation”. That means “Dukan shoppers have a huge degree of trust in the grocer”. As an example – most of the shoppers in kingdom perceive Dukan to sell products similar or better to their well-known brand competitors.
3. No nonsense Approach
Dukan’s ‘no-nonsense’ approach to retailing therefore leads to cost saving in numerous areas. Such as, NO fancy stores, Avoid expensive locations, minimum marketing expenses
These cost savings are passed on to customers in the form of lower prices, allowing the business to differentiate itself from its competitors in terms of price, as well as the quality of the products it has on offer.
4. Supply chain excellence
Dukan’s limited number of lines means that its supply chain is “best in class”. While the supply chain may not be high tech, “it is incredibly lean, with every product being a best seller, and therefore it has great on-shelf availability”.
The high volumes of each product line also mean that Dukan has good relationships with its suppliers. “Dukan’s suppliers know where they stand and the relationships are often long-term and built up on trust so it is generally a better partnership than traditional grocers. The high volume also means it often gets the freshest produce.”
5. Recruiting the best
Dukan’s no-frills stores are basic, with a market-like feel, and it employs just three or four best staff per store. “
Dukan knows where to spend money and its high salaries means it gets great people, who often stay there for longer periods.”
Dukan has a distinctive approach to retailing that is new to KSA. Its operations focus on providing its customers with quality products that are value for money.
Dukan achieves this by ensuring that its operations are as efficient as possible whilst also adhering to its core values of simplicity, consistency and responsibility. Through adopting a variety of lean approaches Dukan is able to offer its customers the highest quality products at the lowest possible price.