Egypt has mostly recovered from recent political and economic instability and its retail sector is booming, according to a report.
The report, by AT Kearney, found the discounter segment is growing particularly fast as the industry shifts away from traditional retail towards a modern model.
With an expanding population predicted to reach 100m by 2020, nearly half of whom live in urban areas with highly sensitive customer price points, Egypt has seen demand grow for discount offerings in the low to medium price bandwidth.
The study predicts the discounter segment will grow by up to 47% in the next three years.
Shamail Siddiqi, principal at AT Kearney, said: “By meeting the demands of a growing population [the Egyptian retail sector] has remained largely intact despite several adversities in the macro landscape.”
Egypt re-entered the AT Kearney Global Retail Development Index (GRDI) this year for the first time since 2011, which the consultancy said reflected its status as an attractive medium to long-term value proposition.
It said the modern retail segment in Egypt was far less saturated than other markets and retail spend in Egypt was expected to rise from around $1,500 per capita in 2015 to more than $1,800 by end of 2017.
The country’s grocery retail market grew by 2% in real terms between 2009 and 2015, with supermarkets making up the largest trade segment with 12% of sales.
Hypermarkets account for 3% of sales, though this segment is expected to double in size by 2019.
Mirko Warschun, lead partner for the Consumer and Retail Practice EMEA at AT Kearney, said: “This year in particular, we can see the return of investors’ appetite and a surge for the first time since 2010.
“The country has a strong growth potential and is creating an investment-friendly climate to encourage both domestic and foreign investment.”
The Greater Cairo residential area, one of the fastest growing areas with double-digit predicted annual population growth until 2020, is proving the most attractive zone for investors.
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