Rising rents and staff costs weigh on Lulu’s 2025 profit

Lulu Retail, the largest grocery retailer in the GCC, said net profit slipped due to rising rentals and staff costs associated with the opening of new stores.

The bottom line declined 18 percent to $205 million in 2025 from $249 million a year ago, it said in a statement to the Abu Dhabi Securities Exchange.

Revenue reached nearly $8 billion last year, up 4 percent annually, supported by a 39 percent year-on-year growth in ecommerce. 

Private-label sales grew by more than 4 percent, increasing penetration to 30 percent, slightly higher year on year.

Fourth-quarter revenue rose 2.4 percent to $1.9 billion, as like-for-like sales grew 2.3 percent along with store openings. Net profit declined more than 50 percent annually to $42 million during the quarter.

Ecommerce sales rose to 52 percent in Q4.

Overall, 20 new stores were opened in 2025, of which 11 were in the UAE, 7 in Saudi Arabia and one each in Kuwait and Bahrain.

Lulu said it has identified a pipeline of 50 new stories between 2026 and 2028.

Loyalty scheme members reached 8.4 million during the year, with loyalty-linked sales climbing to 75 percent. The average basket size was broadly flat at $30.60, compared with $30.80 in 2024. 

The company’s board proposed a dividend of $98.4 million for the second half of 2025, subject to shareholder approval. This will bring the total dividend to $196.9 million in 2025.

The stock closed 1 percent lower at AED1.09 on Friday and is down more than 4 percent so far this year.

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