Bourgeoning Value Sales Growth

The food retail market in Saudi Arabia to grow at a CAGR of around 5 percent by 2020, according to a recent report by Technavio. Saudi Arabia accounts for around 51 percent of the total food retail sales in the GCC region, thanks to the rising population and the increasing disposable income of people in the country. The food retail outlets in Saudi Arabia carry a broad range of options for consumers such as domestically processed foods, imported specialty food products, and organic food products. Consumers prefer to shop at supermarkets and hypermarkets as these food stores also provide an outing for families. The retailers in the food market are trying to increase their stores to gain more market share and consumer segments. With the rise in the influx of tourists in the country because of Mecca, the demand for packaged food in this region will see tremendous growth in the coming years. On the other hand, Iran is a very traditional market in grocery retailing and the number of outlets is very high. It is estimated that there are around 300,000 grocery outlets in the country in 2015, among them independent small groceries are very important accounting for more than half the number, according to a recent report by Euromonitor. Each grocery outlet supports a small number of households in its neighborhood and the culture of shopping via modern grocery channels is still in its initial stage. Food and grocery is by far the largest product sector in Turkey in terms of share of total retail sales according to a recent report by Research and Markets. This sector is expected to witness a robust CAGR of 4.4 percent over the forecast period to reach USD73.02 billion by 2019. Turkish consumers still prefer the local shops called the bakkals over the modern retail formats, but these modern retail stores are fast gaining prominence. Rapid pace of urbanization, increasing disposable incomes and improving living standards is set to drive the demand for high quality food and grocery products thereby auguring well for the market. Moreover, Euromonitor's report states grocery retailers in Morocco is expected to record a poor performance in the forecast period (2016-2021), with a negative value CAGR of 1 percent at constant 2016 prices. This is due to the economic deterioration, which is likely to take time to recover, especially with the unemployment rate reaching double-digits, and the real estate crisis, with mortgages strongly affecting households' purchasing power. In addition, the decline in tourism is impacting the economy of the country, which is also expected to negatively affect retailing in Morocco. The report also indicates that Algerians spend around 40 percent of their household income on groceries. Thus, grocery retailers continued to see strong value sales growth. In 2016, current value sales rose by 11 percent.