Savola CEO: Competition, discount stores weigh on retail margins

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 broader shifts in the Saudi market—including intensifying competition and the rapid growth of discount stores and e-commerce, which forced companies to step up investments to defend market share.

In an interview with Asharq Bloomberg, Hassan said that despite lower retail profitability, Panda stores maintained 9M 2026 sales at SAR 8.5 billion while reducing operating expenses by 4%.

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

Panda, according to the CEO, is pivoting toward maximizing existing store productivity and deepening customer engagement rather than aggressive footprint expansion. With its branch expansion program nearly complete, priority has shifted to driving foot traffic, boosting average basket size, and enhancing its digital and loyalty offerings.

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 operational cost front, Hassan said the group faced higher freight, land transport, and insurance costs due to regional geopolitical conditions. However, it absorbed most of these cost pressures during the nine-month period through targeted operational cost-cutting, alongside minor price adjustments in select markets.

Financially, net debt declined to around SAR 217 million from SAR 600 million last year. "This may be the lowest level in Savola's history," Hassan highlighted, adding that free cash flows 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. Its Q3 bottomline stood at SAR 128.49 million.