The Future of Retail Market in Egypt

Mohamed Galal is the Founder of TSM, a leading Egyptian Company in Mall Management and Retail Development operating in Egypt. Currently, Mohamed is the President & CEO of TSM Mall Management. He is an expert in managing commercial and mixed-use projects in Egypt and has taken the lead in establishing shopping malls in the secondary cities of Egypt. He is a renowned industry member and is contributing to several successful mall developments and retail launches.

MOHAMED GALAL

President & CEO TSM Mall Management MECS+R Regional Representative - Egypt

Egypt is a transcontinental country spanning the northeast corner of Africa and the southwest corner of Asia by a land bridge formed by the Sinai Peninsula. Cairo is the country’s capital and largest city. With over 100 million inhabitants, Egypt remains a sizeable market for retailers and fast-moving consumer goods manufacturers. This has sustained several large domestic producers and attracted global heavyweights to the market. The economic instability and the devaluation of the pound have brought new challenges and a need for the sector to adapt to remain competitive. Modern retail areas are nevertheless expanding, and customers are increasingly interested in interacting with retailers through new technologies, bringing new opportunities for the sector to expand to cater to changing consumer trends. The heavy consumer habits of Egyptian consumers and the underserved commercial space offered in secondary cities are great motives for real estate developers and retailers to continue to expand. Despite COVID contraction all over the world, the impact in Egypt was less drastic. The Egyptian Government continued the road network development plan and succeeded in executing more than 1,000kms of highways, connecting flyovers, and intercity junctions, availing new prime retail space opportunities for rent for new local retailers and F&B operators.

Majid Al Futtaim Malls, City Stars, CFC, Marakez/Mall of Arabia and the likes are the preferred retail destinations in Egypt operated with international management standards and still record the highest visitors footfall and turnover. COVID and controlled access have remodelled retail habits and online became an add-on to physical shopping. Retail companies have also introduced the 360 shops online experience, keeping the clients hooked on the shop visit habits.

Amazon, Noon, and OLX have announced the highest sales levels, and are exponentially increasing their warehousing space. Street Retail has picked up and in city gallerias are receiving increasing numbers of clients due to proximity and improved focused community services. The Egyptian market continues to be very attractive to all retail segments and for regional brands. Despite all the contraction in the retail world, new retail brands have entered the market recently and existing chains are expanding their operations in the cities of Egypt. The continued development of the East of Cairo and Cairo Capital City are becoming new hubs for F&B with more local and regional operators. Also, the Chill-Out chain and street retail hubs introduced by leading entities are shaping street retail and availing great opportunities for F&B and community services. They provide prime modern structured space in prime spots within city centres and the best residential areas which bring the street retail to a more organized profitable level.

The F&B segment in Egypt has greatly evolved and regional Lebanese competitive casual dining operators have raised the standards. The local Egyptian F&B concepts are gaining ground. The local medium real estate developers are trying to benefit from this boom in local F&B operation and are innovating casual F&B hubs and parks to cater for the increasing demand by young Egyptian entrepreneurs aspiring to operate their new F&B endeavours in Dubai and KSA. Egypt’s retail and malls market is definitely becoming an extension of the UAE market and gaining a competitive edge. The increasing purchasing power and endless demand by young clients for innovation and high quality is shaping the market.

Retail is becoming more interactive and clients are much more educated and demanding. Fintech and credit facilities extended to the retail industry are a great support. Locals’ products are also gaining competitive demand.

Startups and new innovative concepts are upgrading the retail industry in Egypt similar to international markets. The increased prices of construction materials worldwide and the slowdown in the supply chain have also hit the Egyptian market. The development of the New Capital City with Dubailike skyscrapers and ultra-modern mixed-use projects is also shaping the new retail and commercial real estate market in Egypt. The recent balancing of the Egyptian currency will have implications yet to be reflected in the pricing and strategies of all businesses.