The grocer rerouted shipments through regional ports while expanding its use of road and air freight.
Dubai: Spinneys, the DFM-listed premium supermarket chain, adopted a new road freight corridor connecting the UK and Europe with the UAE after disruptions around the Strait of Hormuz delayed food shipments by weeks and sent container costs sharply higher, according to the company’s chief executive.
During the first half of the year, the retailer completed 26 road freight shipments from the UK and Europe, using a route through Turkey and Egypt to transport goods overland into the UAE.
The move formed part of a broader strategy to keep supermarket shelves stocked as the geopolitical crisis extended transit times, pushed up container costs and threatened the reliable flow of inventory to its UAE stores.
Spinneys currently sources around 40 per cent of its products through imports, while the remaining 60 per cent comes from local suppliers, including goods produced at its manufacturing facilities in Dubai.
In response to the disruption, the grocer moved to diversify its supply chain by sourcing products from a wider range of markets, rerouting sea shipments through alternative regional ports, increasing the use of air freight and establishing a road freight corridor connecting the UK and Europe with the UAE.
“We have two or three modes of supply,” Spinneys CEO Sunil Kumar told, highlighting the company’s network of local farmers and distributors, alongside its international buying offices in Australia, the UK, Europe and the US.
Kumar’s comments came after Spinneys released its half-year results on Tuesday. Despite the supply-chain disruptions, the retailer reported a 5.1 per cent increase in first-half revenue to Dh1.909 billion, supported by like-for-like sales growth, new store openings, stronger Fresh and Private Label sales, and rising online sales.
The company’s board also approved an interim dividend of Dh122.4 million, equivalent to 3.40 fils per share.
Under normal conditions, sea shipments from the UK and Europe to the UAE take around 30 days. However, at the peak of the disruption in March, some consignments took as long as 100 to 120 days, according to Kumar.
With vessels unable to use their usual routes into Dubai and Abu Dhabi, Spinneys rerouted shipments through Khor Fakkan, Fujairah, Salalah in Oman and Jeddah.
The retailer handles around eight to 10 containers a day, making prolonged delays particularly challenging. In response, Spinneys established a road freight corridor from the UK and Europe, passing through Turkey and Egypt before entering the UAE by land.
The alternative route takes approximately 17 days, compared with about 40 days by sea under the disrupted conditions.
“The lead time has been reduced drastically,” Kumar said.
Although the road corridor is more expensive than conventional sea freight, it became a more attractive option as maritime shipping costs surged. Kumar said the route could also be particularly useful for short-shelf-life products, including eggs, snacks and certain ingredients, where faster delivery can justify the higher transportation costs.
$3,000 to $17,000: The Cost of Shipping Food
The disruption came with a dramatic increase in shipping costs. According to Kumar, the cost of transporting a container jumped from around $3,000 before the crisis to as much as $17,000 during the disruption.
For shipments from the Americas, freight costs surged from around $4,860 to $24,600 per container during the disruption.
Although prices have since come down, they remain significantly above normal levels. UK-Europe shipments now cost around $7,000 per container, while those from the Americas are about $17,000, according to Kumar.
“It’s still extreme,” he said.
In response, Spinneys is exploring alternative sourcing markets, including Australia, New Zealand, South Africa, the UK and Europe, to secure products that have traditionally been imported from the US.
The disruption also put pressure on Spinneys’ margins. First-half gross profit increased 4.1 per cent to Dh784 million, but the gross margin slipped to 41 per cent from 41.5 per cent, as the company faced higher freight costs, inflation, longer transit times and logistics disruptions.
Despite these challenges, product availability remained between 83 and 88 per cent during the second quarter. Shipment delays also improved significantly, falling to nine days in June from 38 days in March.
UAE Shoppers Are Shrinking Their Baskets
At the same time, consumers are becoming increasingly cautious with their spending, leading shoppers to cut back on the size of their grocery baskets.
Spinneys’ transaction volumes increased 6.1 per cent year-on-year to 21.8 million during the first half of the year. However, the average basket size declined to Dh86.40 as shoppers became more selective with their purchases.
“Customers are conscious that we are not buying big trolleys; rather, they choose to come on a daily basis or weekly basis to the store and buy in basket volume,” Kumar said.
He attributed part of the shift to Spinneys’ decision to absorb some of the rising costs instead of passing them fully on to customers. The retailer has frozen prices on 500 key-value SKUs to keep essential products affordable.
“We have deliberately, consciously taken the decision that we don’t want to increase the price on key value lines, 500 SKUs which we have identified. We don’t want to give that cost to customers,” Kumar said.
However, where rising costs could no longer be absorbed, Spinneys adjusted prices upward by increasing recommended selling prices.
“If you don’t require it, and you have an alternative or a substitute available in the store, customers will probably buy less,” Kumar said.
The shift reflects a common retail trend known as “trading down”, where shoppers opt for more affordable alternatives instead of purchasing higher-priced products.
Private-Label Business
Private-label products contributed 47.3 per cent of Spinneys’ revenue in the first half of 2026, with penetration rising by 260 basis points year-on-year. Fresh products, meanwhile, accounted for 64.5 per cent of total sales.
Kumar said Spinneys plans to expand its private-label offering across more categories, giving the retailer greater control over everything from sourcing and manufacturing to logistics and pricing.
“We want to take private label into almost every category where we can offer the customer value,” Kumar said.
The retailer is already broadening its private-label range to include products such as body washes, shampoos, conditioners and creams, and is also preparing to launch its own vitamin range.
‘Spinneys Will Continue to Grow’
Despite the challenges facing the retail sector, Kumar remains optimistic about Spinneys’ growth prospects in the UAE and other regional markets.
Spinneys opened 11 stores across the UAE and Saudi Arabia in the 12 months through June, pushing its gross selling area beyond one million square feet for the first time. The company now employs nearly 6,000 people across its retail and manufacturing operations as it continues to expand its footprint.
The retailer plans to open three more stores in the UAE by the end of 2026, while its first outlets in Kuwait and the Philippines are scheduled to open in early Q1 2027.
Spinneys has also raised its stake in its Saudi business from 50 per cent to 70 per cent, reinforcing its presence in the Kingdom and supporting its wider regional expansion strategy.
For Kumar, however, the disruption has ultimately served as a lesson in adaptability — one that could continue to shape the business long after the current crisis ends.
From identifying alternative ports and overland routes to diversifying sourcing across continents and increasing local production, Spinneys has been forced to develop a more flexible supply network capable of keeping goods moving when traditional routes are disrupted.
“Every crisis will bring and open many doors of opportunities,” Kumar said, pointing to opportunities in product assortment, business strategy and other areas of the company’s operations.
