UAE’s Sumo Sushi rolls out fresh expansion plan
Dubai: UAE-based Sumo Sushi & Bento plans to expand to 40 branches in the Gulf by 2021, and with half of those opening by this year-end. The homegrown restaurant concept, launched in Dubai in 2000, has partnered with the Apparel Group on adding the 20 new outlets.
Already present in four Gulf countries, the company’s chief executive says new openings in Kuwait and Saudi Arabia are in the pipeline, scheduled for 2019 and 2020 respectively.
“While it sounds aggressive, I think it’s just really mindful of what the market has, the product we have to offer and the placement,” said Julianne Holt-Kailihiwa, chief executive of Sumo International, the restaurant’s parent company. “There’s a lot of thought that goes in to where we go and where we position ourselves.”
While Holt-Kailihiwa noted that Saudi Arabia was considered by most to be the Gulf’s most promising growth market, there was room for growth in the UAE too despite the high volume of restaurants. A 2017 study by KPMG suggested that sales across Dubai restaurants were decreasing as a result of the high number of restaurants in the city.
The report indicates that if overnight visitors are considered, Dubai has a greater number of outlets per million than New York.
“[When we opened in Dubai] it was a wide open market” because there were so few affordable, California-style sushi restaurants available, Holt-Kailihiwa said. “In our sector, it’s been more competitive in the last three of four years, just with so many new players wanting to enter the market.”
Holt-Kailihiwa said that the past 18 months had been challenging.
“Margins are shrinking. Typically rents only increase — I mean, there’s been some leeway here and there recently — but costs always go up, they never go down.”
The executive said the company had felt some hesitancy in the market following the introduction of a 5 per cent value-added tax (VAT) in January last.
“It felt in the beginning of the year that customers were a little bit more cautious... but it bounced back and they returned to their spending behaviour,” she said.
Holt-Kailihiwa also revealed that the company was currently exploring opportunities in India, a potentially lucrative market of 1.3 billion people that has historically been difficult for international entrants to crack.
“Right now, India makes sense. We have some really positive discussions going on. I was amazed by the opportunity there in the Japanese food sector,” she said.
“It’s a hard place. I’ve been to conferences there. I’ve read a lot of case studies on the big American brands that have come in and failed miserably. Hopefully, we can learn from their mistakes.”