Prime Minister Anthony Albanese has invited Emirati 'hypermarket' chain LuLu Group to set up shop on Australia's shores and take on supermarket giants Coles and Woolworths.

Mr Albanese confirmed the invitation to LuLu Hypermarket chairman Yusuff Ali while on a pit stop through the United Arab Emirates, as a free trade agreement with the Middle Eastern nation takes force.

"One of the great things about the [LuLu Group] chairman's company, there are 300 supermarkets just like this one, I have encouraged him to come to Australia as well," Mr Albanese said.

"I have encouraged him to come to Australia as well, we need more competition in the Australian supermarket sector, and we have had a little discussion about that."

LuLu Hypermarket is one of the largest retail chains in the Middle East

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