Alsaif Gallery adopted 'loss leader pricing' for marketing purposes: CEO

Mohammed Suleiman Al-Saif, CEO of Al-Saif Stores for Development and Investment Co. 

Al-Saif Stores for Development and Investment Co. (Alsaif Gallery) CEO Mohammed Suleiman Al-Saif stated that the company has slashed the prices of well-known products for marketing purposes.

In an interview with the Sawalef Business podcast, Al-Saif explained that as a marketing strategy, the company sometimes had to sell some products, particularly well-known ones, at a loss in order to attract customers and have the total average of their shopping basket become profitable for the company.

He went on to say that rival companies sell a well-known French brand for 650 riyals, while the company sells it for SAR 605 at a profit of only SAR 5.

The CEO further noted that the company's manufacturing profit margin is between 35% and 40%, and that these products currently account for 85% of branch sales.

The company currently manufactures several household and electrical products under the Edison brand. The profit margin on products from agencies is 10%. In addition, at the end of the year, there is an incentive discount of 2% to 7% when paying the balance, depending on the size of the sales invoice from the agent, he said.

Al-Saif added that the company's e-commerce sales account for about 10% of its overall annual sales, compared to only 1% before the COVID pandemic.

As for the company’s future expansions, the CEO revealed that Alsaif Gallery seeks to further expand in the UAE, Kuwait, and Jordan, noting that the Egyptian market is currently excluded due to what is happening in the pound exchange rate against the dollar.