One of the most significant shifts in consumer behavior has been the increased pressure on household budgets, which has led to a heightened focus on affordability and value. This trend was highlighted by industry leaders Dr. Bander Hamooh, CEO of Panda Retail Corp., and Neeraj Teckchandani, CEO of Apparel Group, during a panel discussion at the 2025 RLC Global Forum in Riyadh, moderated by Karl Nader, Partner & Managing Director at AlixPartners. According to them, retailers are responding by reinforcing their value positioning, ensuring that customers can access high-quality products without compromising on price. The rise of private label offerings is a clear indicator of this trend, as brands seek to deliver affordable alternatives while maintaining profitability.
Convenience is another defining expectation of today’s consumers. The demand for frictionless shopping experiences has driven significant investments in e-commerce, quick delivery solutions, and grab-and-go product categories. Retailers are enhancing their omnichannel capabilities to create seamless transitions between physical and digital stores. The integration of AI-driven personalization is also playing a key role, allowing brands to leverage customer data to deliver tailored experiences both online and in-store.
Technology and expansion as growth drivers
For retailers looking to future-proof their businesses, technology is proving to be an essential enabler. AI and automation are no longer optional; they are at the heart of inventory management, demand forecasting, and customer engagement strategies. With access to extensive consumer data, retailers can now predict buying patterns, optimize product availability, and deliver targeted promotions that enhance loyalty and drive sales.
The adoption of artificial intelligence in pricing optimization, inventory control, and customer experience management is already showing significant returns. Companies with large consumer databases—some exceeding 10 million customers—are using AI to understand purchasing behaviors and refine their offerings accordingly. These tools allow retailers to not only reduce operational inefficiencies but also improve customer satisfaction by ensuring that products are available when and where they are needed.
Expansion is another key component of the 2025 retail agenda. Smart retailers are balancing aggressive growth with strategic market entry, ensuring that each new location aligns with consumer demand and demographic insights. In Saudi Arabia, for example, the pace of retail expansion has accelerated, with leading companies opening new stores at an unprecedented rate. The focus is not just on geographic expansion but also on format diversification—developing hypermarkets, supermarkets, and online storefronts to serve different consumer segments.
The evolving role of value retail and discount segments
The rise of discounters and off-price retailers is reshaping the retail landscape, as consumers increasingly seek affordable yet high-quality alternatives. While value-driven retail models have long been popular in Europe and North America, their adoption in the Middle East is gaining momentum. In response, established retailers are refining their assortment strategies, pricing models, and promotional tactics to maintain a competitive edge.
Rather than engaging in price wars, retailers are focusing on true value creation, offering differentiated products that balance affordability, convenience, and quality. The private label segment is a major growth area, with retailers expanding their in-house brand portfolios to give consumers greater choice.
Retailers are also recognizing that different markets require localized strategies. The dynamics in Saudi Arabia, for example, differ from those in the UAE or other Gulf markets. Each region demands a tailored approach to pricing, assortment, and customer engagement, ensuring that retail offerings align with consumer needs and economic conditions.
Strategic partnerships and omnichannel growth
Retailers are increasingly forming partnerships with global technology leaders to enhance their e-commerce and fulfillment capabilities. One of the most notable recent developments is the integration of AI-powered automation in online grocery shopping, which is revolutionizing how consumers browse, purchase, and receive their products. This investment in smart logistics and automated fulfillment centers reflects a broader industry trend toward efficiency-driven retail models.
Omnichannel retail is a necessity, and the best-performing retailers are blending physical and digital channels to create an experience that is both personalized and frictionless. From same-day delivery innovations to enhanced in-store pickup options, companies are finding ways to ensure that customers can shop on their own terms.
With increasing competition from cross-border e-commerce players, regional retailers must continue investing in customer data analytics, last-mile delivery solutions, and store-based fulfillment networks to stay ahead. The key differentiator in the future will be how well companies integrate their online and offline experiences to provide customers with a true omnichannel journey.
Retail leadership in 2025: Balancing growth and innovation
Strong leadership is central to this era of retail transformation. The most successful companies are led by executives who embrace innovation while maintaining financial discipline. Growth strategies must be balanced with sustainable operational models, ensuring that investments in technology, store expansion, and digital transformation yield long-term profitability.
Retail executives also acknowledge that people and teams drive success. A well-structured organization that empowers its employees, fosters a culture of continuous improvement, and integrates AI-driven decision-making into everyday operations is positioned to lead in 2025 and beyond. The importance of building strong leadership teams, streamlining operations, and adapting quickly to industry shifts cannot be overstated.
“For Panda, 2025 is about expannovation—expanding with bold investments in technology and innovation to reshape the future of retail.”
– Dr. Bander Hamooh
