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New Report Available: Egypt Retail Report Q3 2013

New Retailing market report from Business Monitor International: "Egypt Retail Report Q3 2013"


Boston, MA -- (SBWIRE) -- 09/11/2013 -- 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. Egyptian per-capita consumer spending is forecast to more than double by 2017, compared with a regional growth average of 53.5%. The country 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 top performers through to 2017 in growth terms, with unit sales forecast to increase from 214,841 units in 2013 to 382,874 units by 2017. However, sales growth in the short term are likely to be constrained, with automobile sales figures from Ghabbour Auto (which has a 29% share of the Egyptian passenger car market), reporting that sales (in unit terms) were down 12.6% year-on-year (y-o-y) between October and December 2012, following a drop of 25.0% y-o-y in the previous quarter.

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:

- Following an influx in foreign aid in April 2013, it appears that Egypt will be spared a more pronounced balance of payments crisis this year. That said, as the aid inflows are likely to weaken the government's resolve to push ahead with necessary subsidy and tax reforms, we do not expect an IMF agreement to be signed in the near term. We are forecasting real GDP growth of 1.9% and 3.7% in FY2012/13 and FY2013/14 respectively.
- We are projecting household consumption expanding 3.3% in FY2012/13, marking the slowest pace in nearly a decade. With inflation and unemployment both expected to trend higher, and interest rates rising, the backdrop for consumer spending is bleak. Some respite should, however, be provided by strong remittance inflows.

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