LOGIC Consulting

January 23, 2021


The Egyptian Retail Industry is Experiencing a ‘Roller-Coaster’ Ride in 2020

The COVID-19 pandemic has fundamentally changed how people live and work, how and what they buy and how they think. All industries, undoubtedly, have been impacted by the COVID-19 crisis, but with varying degrees of severity. And for the retail industry, the effects were profound and lasting, and the crisis has already accelerated immense structural changes and has caught many retailers off guard. As consumers are now looking at products and brands through a new lens, retailers are left with no choice but to reconsider their operations, rethink their assortment and channel strategy, adjust how they approach customer experience to best position themselves in this recovery period. Retailers can’t afford to slacken their efforts, given the possibility that some changes in consumer behavior and demand might crystalize once the dust settles. Egypt so far has been hit relatively less by the virus due to the relative fast reopening of the market. In this article, we will be looking at how different retail categories, from food service to fashion, have been affected in Egypt. Also, given the severity and uncertainties in this disruption, we will also be identifying some actions that could help retailers steer through such crisis and turn massive challenges into meaningful change.

The retail shakeout amid Covid-19 in Egypt

With the increasingly drastic restrictions on movement and millions of people hunkering down, the only busy stores were grocery stores. 
Grocery stores were classified as “life-sustaining” retail sectors, as they remained open for business in foot traffic.
despite the decline According to Abdullah Rhwanjy , CIO of United Grocers (Seoudi Supermarket), “While, globally, all supermarkets and hypermarkets buckled under the soaring demand that strained the entire ecosystem, Egypt was better prepared as manufactures were already getting ready for Ramadan demand spikes. Supply shortages were not so much felt because of that.”

Yet, as social distancing and economic worries cascaded, more customers from all demographics anxiously filled their carts with household necessities and non-perishables.

Also, as restaurants and cafes have been closed and people getting more concerned about hygiene and food safety, takeout ordering has declined and supermarkets sales have, consequently, hiked.
In Egypt, sales volume hiked during lockdown in hypermarkets and supermarkets, with the increase ranging between 40% and 100% per store.
Although supermarkets might emerge as a post-pandemic winner, the crisis has created an operational nightmare and supply chain disruption for nearly all of them. Also, they needed to handle the “loyalty shock” that emerged due to panic buying as consumers started changing stores based on location and availability of essential and fresh goods.

Even though COVID-19 restrictions are lifted, it will take some time before consumers feel safe. This has forced supermarkets and hypermarkets to adapt to the new psychological and public health changes. In light of this, we have seen many of them implementing new protocols and making physical changes to their layouts to ensure customers and employees safety including in-store shopper count limitations, clearly-marked 6-foot areas, sterilized carts, baskets and registers, etc.

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