Elaine Watson reports on Naafi’s daunting trading places in Iraq

It sounds almost too good to be true. Captive customers with time on their hands and cash to spend and nowhere to spend it except your shop. So what’s the catch?

The shop in question is on an army base in downtown Basra, the boss can’t leave it without an armed guard and if a delivery is late, there’s a chance it has been the victim of a hijacking, a robbery, a kidnapping - or something worse.

Setting up shop in Iraq is a dangerous game, whether you are on an army base or not, says Chris Malcomson, the man in charge of armed forces retailer Naafi in the country. “Outside the bases, security is very poor. We get three deliveries a week into the shop at Shaibah (a British army base 20km south west of Basra) from Kuwait, but every truck entering or leaving has to be escorted, even if it’s just me going to a meeting.”

The 4,000 sq ft Naafi shop at Shaibah is one of five Naafi outlets in Iraq, but by far the most sophisticated, says Malcomson, who owes his position as MD of the Naafi in Iraq to his command of Arabic and years of experience in retailing in the Middle East.

Temporary Naafi stores in Al Amarah, Umm Qasr, Basra airport and the palace in Basra will also be made more permanent in the coming months, he says. “The official line is, we don’t know how long we will be here; they say power will be handed to the Iraqis in June, with elections to follow [later in the year]. But let’s face it, there are still troops in Germany 60 years after the Second World War, and my guess is we will maintain a presence in Iraq for years and years.”

The shop at Shaibah, which is part of a club and leisure complex, serves about 3,500 soldiers of six or seven different nationalities posted at the base. But it also has to cater for sudden influxes of troops flying in at short notice from the airport, says Malcomson. “It’s a logistical nightmare, because you can’t just order extra stock if there’s a sudden busy period. You can’t be spontaneous. Everything has to be planned weeks in advance, as we have to ship goods in containers over to a warehouse in Kuwait
before transporting them under armed guard across the border to Iraq.”

The containers sit outside the store alongside freezers and refrigerators, which are run by generators, so that troops can enjoy cold drinks and ice creams.

Although there is a full range of groceries, cigarettes and toiletries on offer, the real money is in gadgets and gizmos designed for soldiers - young men with too much time and money on their hands, says Malcomson. “We have totally swung the balance of merchandise now to non-food - which represents about 70% of the business. Things like digital cameras and even 21-inch TVs, which are all duty free, are selling as soon as we put them on the shelves.

“We are building a really substantial business, with about 600 paying customers a day, each spending around $24. We did almost $1m in the last eight weeks - not bad for a 4,000 sq ft store. The important thing when your customers visit you every day is to keep them interested, with new stock, promotions and merchandising.”

Baghdad is next in Malcomson’s sights, he says, although he is quick to stress that this is not just about making a fast buck. “As well as providing a service to the military, which is what Naafi is about, we provide employment for local people - and at the moment, they are just thrilled to have a job.”