Windows of opportunity

Reaching untapped markets within the region, and indeed across the globe, is crucial for retailers and FMCG brands this year.

With a population approaching 30 million and substantial oil resources, security is now improving in Iraq and FMCG firms are keen to examine the opportunities on offer in the country.

Dubai-based Middle East marketing expert IMES Consulting has announced the launch of multi-client studies covering the markets for dairy products and non-alcoholic beverages in Iraq.

"We are very pleased to have reached an agreement with one of Iraq's leading business families, active in both food and beverage manufacturing and importing, to provide us with support within the country, facilitating access and insights that might otherwise be impossible," said IMES Consulting MD David Edwards.

Al Islami Foods has signed a major distribution agreement with the Baghdad Poultry and Meat Preparing Company, while FINE Hygienic Paper FZE has opened its new manufacturing facility in Tehran.

The Iranian market is potentially twice the size of the entire GCC and the country has many characteristics that are attractive to marketers, according to Edwards.

More than 50% of the population is under the age of 25, most people are relatively well educated with a literacy rate at around 80% and 65% live in urban areas, simplifying distribution to them.

While homegrown and international players invest heavily in the Middle East's up-and-coming markets, the situation in Europe and the UK is drastically different, with retailers unveiling plans to cut costs as they battle to protect profits.

The executive chairman of Marks & Spencer, Sir Stuart Rose, said that while trading conditions were tough, he was not prepared to lower his standard of quality in a bid to slash prices for customers.

Metro AG, Germany's top listed retailer, said it would cut 15,000 jobs as part of a drive aimed at adding 1.5 billion euros (US $2 billion) to profits by 2012.

British luxury goods company Burberry announced up to 35 million pounds ($ $49 million) of savings, including 540 job losses in the UK and Spain.

"Most retailers are facing up to the fact that like-for-like growth this year will be modest, or flat, or down," said Bryan Roberts, global research director for global intelligance provider Planet Retail.

"They can't rely on the top line (sales) to drive profitability, so the next thing within their control is the cost base."

In this month's feature on the region's untapped markets, IMES Consulting managing director David Edwards investigates why this is "an interesting time to look at two regional countries where market prospects are somewhat detached from the malaise in the Western economic system - Iran and Iraq".

Lynne Nolan is the editor of Retail News Middle East.

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