The distribution network in Egypt

Evolution of the Sector: Egypt remains the largest consumer market and most diversified economy in the Arab world, with a retail food market still dominated by small, privately held stores. In fact, traditional grocery stores are still leading the country's retail food sector - representing 96.6% of total outlets and around 74% of total sales - though supermarket chains, convenience stores, and online retailing platforms are growing in number and popularity. Modern retail channels, such as supermarkets, hypermarkets and convenience stores, have a combined 4,120 outlets, compared to traditional grocery retailers who have more than 117,500 (USDA).

The Egyptian retail foods sector is estimated to generate around USD 17.5 billion (USDA). Sales in modern supermarket and hypermarket chains are expected to continue to grow, according to US retail analysts. Online retail platforms' popularity is increasing thanks to the rise in internet penetration rates.
Traditional grocers and wet markets maintain a loyal, neighbourhood customer base as they are easily accessible and sometimes offer credit to local consumers. The segment is clearly constrained by space (retail and parking) and is unable to compete with larger retailers who can take advantage of economies of scale. Modern supermarket and hypermarket chains confronted the consumers' increased price sensitivity by running promotions, creating loyalty programs, and offering bulk discounts; or often replacing imported products with locally-produced ones. Some chains - like BIM from Turkey and the local Kazyon - started setting up chains of small neighborhood stores, now counting with around 300 and 424 outlets, respectively (USDA).
Market share: The market is still dominated by a large number of small family-run stores. The development of mass distribution is a rather recent trend and it only caters to a small fraction of the population who have access to sufficient income. Many private mini-markets with a larger store space often exceeding 100 m2 (Sunny Supermarket, ABC, Alfa Market, Metro) have opened. In addition, several supermarkets have burgeoned in the country and the Carrefour group, with five supermarkets, dominates the field. A more recent trend is the advent of discount supermarkets. For example, the Awlad Ragab group or the Khir Zaman chain. In terms of market share, the supermarkets and hypermarkets represent 26% of sales compared to 74% for the small family-run stores (US Department of Agriculture).

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