New Market Research Report: Egypt Retail Report Q1 2013

Boston, MA -- (SBWIRE) -- 03/18/2013 -- 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.

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Egyptian per-capita consumer spending is forecast to increase by 73.7% between 2013 and 2016, compared with a regional growth average of -2.7%. The country comes last in BMI's Middle East and Africa Retail Risk/Reward Ratings, although it outperforms slightly for Reward.

Among all retail categories, autos will be the outperformer between 2013 and 2016 in growth terms, with unit sales forecast to increase by 53%, from 0.19mn units to 0.29mn units. However, sales growth in the short term is likely to be constrained, with latest automobile sales figures from Ghabbour Auto (which has a 40% share of the Egyptian market) showing the number of units sold between January and March 2012 remaining below 2009 levels. 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 is forecasting a slight acceleration in Egyptian real GDP growth over the coming quarters, with our baseline scenario seeing the economy expand 3.5% in FY2012/13 (fiscal year running from July-June), up from 2.2% in FY2011/12. Should Egypt sign a long-awaited IMF Stand-By Arrangement, we would expect the drivers of growth to change slightly. Household consumption would be likely to suffer due to hikes in domestic gas prices, while fixed investment should pick up as a result of greater clarity on the economic policy front.

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