Lulu’s F&B division presses on with its casual dining plan

Tablez Food Company opened the UAE’s first Genghis Grill restaurant in Abu Dhabi’s Al Wahda Mall and said that it had already signed deals to open two more stores over the next two years in Dubai.

Above, Genghis Grill restaurant at the Wahda Mall extension in Abu Dhabi. Mona Al Marzooqi / The National

The food division of hypermarket chain Lulu is pressing ahead with plans to open dozens of new casual dining restaurants in the UAE despite fears that the market is becoming saturated.

Tablez Food Company, the food-and-beverage arm of Lulu International Group, opened the UAE’s first Genghis Grill restaurant in Abu Dhabi’s Al Wahda Mall yesterday and said that it had already signed deals to open two more stores over the next two years in Dubai.

Tablez, which over the past seven years has grown to operate 38 outlets in the UAE, said that it plans to continue a fast-paced schedule of restaurant openings, including more of the US-based Asian restaurant concept, despite a slowdown in the economy and fears that more restaurants are opening than demand can sustain.

"Corrections will happen but good restaurants and good players will stay on," Shafeena Yusuff Ali, the chief executive of Tablez told The National. "There will be some churn and some operators and some restaurants will fall away. We as a business have got the recipe right.

“We have great brands, good food, great locations, good value proposition. The foundation is very strong. And we have built a sufficient scale where we have synergies at the back end. All of our business is packaged well. If there is a slowdown we should be OK. We will be actually in a very good position.”

Tablez, which already operates brands including Galito’s, Bloomsbury’s, London Dairy, Peppermill and Famous Dave’s, expects to operate 70 outlets by 2020.

The company said it has already signed deals to open two more Genghis Grills in Ibn Battuta Mall extension and Al Khail Avenue Mall in Dubai, which is set to open 2019, but is actively looking to open new stores elsewhere sooner.

The company is also planning to launch two new brands including a Filipino restaurant.

“It’s about us identifying niches in the market and filling them rather than ‘Oh there’s a burger fad at the moment let’s open a burger chain’,” Ms Ali said. “We should really find spaces that are not occupied.”

Last year, KPMG reported that the supply of new outlets and concepts flooding into the overcrowded UAE food and beverage market was outstripping demand. It estimates that the UAE has 16,234 F&B outlets and that number is expected to increase to 19,053 by 2020. At the same time a fall in the global price of oil means that economic growth in the country is slowing.

Property broker CBRE also reported that nearly 30 per cent of new entrants into the UAE’s retail space last year comprised F&B operators.

Tablez said that the difficult marketplace for F&B operators meant that landlords were often willing to reduce rents.

“Most of our leases have been committed prior to whatever is happening with rents now, but we are negotiating with developers where we can,” Ms Ali said. “It depends on each location but we have seen falls of between 5 and 10 per cent. It’s a bit tricky to quote because in some places we get better and in some places we don’t get a reduction at all but that’s a ballpark figure.”

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