Sales via traditional grocery retailers are set to see slightly stronger growth in 2020 than in 2019, although by no means exceptionally higher than peak growth over the review period. Like modern grocery retailing, these outlets have benefited from the restrictions on foodservice and the shuttering of educational institutions, meaning that more consumers were forced to take more of their meals at home.
Changing consumer shopping habits during the pandemic have accelerated the shift away from traditional grocery retailers in Azerbaijan to modern grocery retailers. In part, this is a reflection of the fact that supermarkets (and now hypermarkets) have a far broader range of products, and as a result consumers have been able to do all of their shopping in a single trip.
A key competitive advantage for traditional retailers during the pandemic has been the strong personal relationships these operators enjoy among their highly localised consumer bases. Anxiety during lockdown has unsurprisingly sharpened, and retailers that are able to strengthen their service offer in response to consumer demand have thrived.
Although modern grocery retailers are anticipated to continue to erode sales share generated by traditional grocery retailers, there will be marked regional variety in this trend, and traditional formats will continue to be the dominant channel over the forecast period. Modern grocery retailing sales are being driven by a mixture of factors, including rising urbanisation, an emerging middle class who perceive themselves to be time poor and are highly responsive to convenience, and ongoing investment in new outlets.
Although Azerbaijan’s economy is anticipated to emerge from the pandemic in a better-than-expected shape, the country still faces a sharp economic contraction in 2020, as well as weakened consumer confidence and uncertainty surrounding employment. Household incomes are set to drop, and as a result price sensitivity is sharpening.
Consumer health awareness has unsurprisingly sharpened in 2020, and could become a useful development tool over the forecast period for traditional grocery retailers. Many Azerbaijanis still prefer to buy fresh produce from smaller retailers as they believe the products are healthier, thanks to the retailers closer relationship to producers.
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Understand the latest market trends and future growth opportunities for the Traditional Grocery Retailers industry in Azerbaijan with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Traditional Grocery Retailers research and analysis database.
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