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Recently released market study: Egypt Retail Report Q1 2014

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2013-12-25 23:32:30 - Fast Market Research recommends "Egypt Retail Report Q1 2014" from Business Monitor International, now available

The Egyptian retail sector is set to continue to grow over the next few years, with its vast and continuously expanding population and increasing levels of disposable income resulting in a strong rise in household spending across all retail subsectors. We are particularly positive about the future growth prospects for health and transport; however, we expect the highest proportion of the household budget to be spent on food & drink throughout our forecast period, with housing & utilities spending also taking a substantial share.

The new Egyptian retail report provides an extensive and comprehensive forecast of various retail indicators including household spending and headline total spending across each retail subsector, household income and employment forecasts, demographic forecasts and a detailed breakdown

of household and per capita spending across a large number of retail areas including food & drink, clothing & footwear, household goods and a number of other subsectors.

Although the Egyptian retail market remains fragmented, dominated by small, family-run shops in highly populated urban areas, the organised retail market has been developing slowly but steadily in recent years as more consumers are converting to modern retail methods. The market share of small neighbourhood outlets is undoubtedly beginning to decline as the modern retail sector grows. With the arrival of mass grocery retail (MGR) in particular, Egyptian consumers have been exposed to a new shopping experience.

Full Report Details at

In a country in which almost a third of the population is in the 20-39 years age range, important for household spending on the retail sector, large shopping malls are attracting young consumers who aspire to the international brands that are increasingly becoming available. City Stars, which opened in Cairo in 2005, is the largest shopping mall in the Middle East and North Africa, with tenants including the UK's Marks & Spencer (M&S). Dubai-based mall developer Majid Al Futtaim Properties, meanwhile, began construction of its US$800mn Mall of Egypt project in September 2013.

We see long-term potential in the Egyptian consumer market, particularly for non-essential items and aspirational purchasing by younger consumers whose incomes are rising. We forecast the average net household income will be US$9,250 in 2013, with almost 80% households falling into the bottom wage bracket of US$5,000+, and less than 24% of households earning US$10,000 or more. However, by 2018, more than 72% of households are expected to be in this middle-income bracket, which represents the key demographic for increased household spending on luxury items beyond necessities such as food, utilities and transport. We expect a corresponding increase in household spending on furnishing & home; communications; personal care; and, to a lesser extent, on clothing & footwear.

While the country's political problems are likely to weigh on its growth prospects over the coming couple of years, there is a considerable amount of pent-up demand which will help boost consumption and investment once the political situation stabilises. Given our, albeit cautious, expectation that the worst of the political crisis is behind us, our forecasts see real GDP growth picking up to 4.2% and 6.3% in FY2015 and FY2016 respectively.

Recent Developments Include:

* IKEA is expanding into Cairo in partnership with the al-Futtaim Group, with an outlet in Cairo Festival City.
* Turkish discount supermarket BIM entered the Egyptian market in 2013, expanding its previous presence in Morocco and Turkey.
* M&S continues to expand in Egypt with plans for a two-floor, 4,400m2 flagship store at the Cairo Festival City shopping mall.

Key BMI Forecasts:

* We expect total household spending to be US$90.53bn in 2013.
* Household numbers will reach more than 23.0mn in 2013, up 3.9% from the year before, and we expect growth to average 3.4% throughout our forecast period to 2018.
* Around 19.6mn households will be in the US$10,000+ income bracket by the end of 2018, according to our forecasts, more than three times the 2013 figure of 5.5mn households.
* In our proprietary Risk Reward Ratings, Egypt scores an overall retail risk reward rating of 55.67, putting it in fifth place regionally, boosted by its large population and strong forecast household spending growth, but held back by low per capita household spending and political instability.

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at

About Fast Market Research

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