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Egypt Retail Report Q2 2013 - New Market Research Report

Fast Market Research recommends "Egypt Retail Report Q2 2013" from Business Monitor International, now available


Boston, MA -- (SBWIRE) -- 05/24/2013 -- The Egypt Retail Report examines the long-term potential of the local consumer market, but flags shortterm concerns about the impact on Egypt's economic outlook of ongoing policy uncertainty. The report examines how best to maximise returns in the Egyptian retail market while minimising investment risk, and also explores the impact of the generally weak outlook for the global economy heading into 2013 on the Egyptian consumer and on the ability of producers and exporters to realise returns in the short term.

The report also analyses the growth and risk management strategies being employed by the leading players in the Egyptian retail sector as they seek to maximise the growth opportunities offered by the local market. Egypt comes last in BMI's Middle East and Africa Retail Risk/Reward Ratings, although it outperforms slightly for Reward.

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Among all retail categories, autos will be one of the outperformers between 2013 and 2017 in growth terms, with unit sales forecast to increase by 67%, from 210,822 units to 352,128 units. However, sales growth in the short term is likely to be constrained, with automobile sales figures from Ghabbour Auto (which has a 40% share of the Egyptian market) showing sales of new cars falling 25.0% year-on-year between July and September 2012, indicating that consumers are continuing to put off major purchases amid the uncertain economic backdrop.

Car ownership in Egypt is estimated at around 23 cars per 1,000 people, compared with 35 per 1,000 in Iran and more than 100 per 1,000 in Saudi Arabia, which means the country has considerable room for growth. In the competitive arena, BMI sees upside potential in trade tariff reform between Egypt and the EU, which will open the market for more overseas manufacturers and expand export opportunities for domestic producers.

Over the last quarter, BMI has revised the following forecasts/views:

- BMI argues that the Egyptian economy is unlikely to stage a more pronounced recovery in the near term. Without a stabilisation in the political environment or greater clarity on medium-term policy, consumption and investment patterns will remain depressed. We are projecting real GDP growth of 2.6% in FY2012/13, and 3.6% in FY2013/14.
- We are forecasting private consumption expanding by 3.5% in FY2012/13 and FY2013/14 respectively. Depending on the extent to which the government carries out structural economic reforms and changes to the energy subsidy system, household spending patterns could be severely undermined. The initial programme drawn up by the administration of President Morsi to secure IMF funding would have seen a range of new tax measures implemented, in addition to further rises in domestic gas prices. With unemployment trending steadily higher, there is little to suggest that household spending will suddenly accelerate, although some respite should be provided by robust remittance inflows.

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