Variety Stores in Egypt

2020 IMPACT

Lockdown measures led to temporary store closures, driving a decline in retail current value sales

The retail current value sales of variety stores declined for the first time in almost a decade during 2020. Lockdown measures led many stores to close for an extended period, and even after they re-opened, the economic damage wrought by the pandemic led some consumers to rein in their discretionary expenditure.

Low barriers to entry result in a large number of small players

The retail current value sales of variety stores in Egypt are highly fragmented, with a large number of small outlets that operate independently. The three largest banners in variety stores – Set El Kol Co’s Dalaa El Banat and Akher El Ankoud and Miniso – accounted for less than 10% of retail value share between them in 2020.

Chinese retailer Miniso continues its rapid expansion

Chinese retailer Miniso, which describes itself as “a Japanese-inspired lifestyle product retailer,” has expanded rapidly in Egypt since opening its first two stores in the country during early 2018. By 2020, it had 17 outlets in Egypt, many of which are located in shopping malls, and ranked third among variety stores in terms of retail value share.

RECOVERY AND OPPORTUNITIES

Post-pandemic normalisation will see increased footfall and impulse purchases

The retail current value sales of variety stores are set to rebound strongly during 2020, as daily life returns to something approaching normality and economic activity revives. This will lead to an increase in footfall and impulse purchasing.

Leader Set El Kol Co will continue to be squeezed by Miniso and independent operators

The retail value share of leader Set El Kol Co is likely to continue to be squeezed during the forecast period. On the one hand, Miniso will continue to expand and may well overtake both of Set El Kol Co’s leading variety store banners – Dalaa El Banat and Akher El Ankoud.

More variety stores will provide courses to build customer loyalty and differentiate themselves from their rivals

Variety stores in Egypt are increasingly offering courses in such skills as tailoring, painting and handicrafts – ranging from crocheting to jewellery making. This trend is likely to deepen during the forecast period, as intensifying competition puts downward pressure on their margins.