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Mon 9 Jun 2008 04:00 AM

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Time to exit the comfort zone

The debut of Germany's biggest retailer in Egypt could trigger a revolution in the country's retail landscape.

The announcement that Germany's biggest retailer will introduce its Cash & Carry subsidiary in Egypt is likely to have immeasurable implications.

In a country where consumers embrace chiefly small- to medium-sized shops, Metro Group's target of 20 self-service wholesale stores could trigger a proliferation of global ventures and in turn, a revolution in the retail landscape.

CEO of Metro Cash & Carry International Frans WH Muller proclaimed thatEgypt's 80-million strong population exerted its pull on the 2200-store strong giant, a demographic that will, unquestionably, have a domino effect on the market.

The Middle East has yet to witness a sizeable concentration of multinational retail enterprises compared to markets such as Europe and the US, where expansion by the likes of Wal-Mart, Tesco and Asda have forced measures to be implemented to clamp down on hegemony.

The knock-on effects of Metro Group's first appearance in Cairo late next year will be the creation of 250 jobs at each store and an investment in the further establishment of modern trade infrastructures.

As if its promises to splash out on hiking up the condition of the industry were not enough, Metro Cash & Carry will contribute heavily to the economy by sourcing from local farmers, producers and suppliers for the chain, to fall under the Makro brand.

One the most important retailing companies with 280,000 employees across 31 countries at its wholesale, hypermarket, consumer electronics and department store formats, Metro's decision to debut in Egypt has shocked homegrown players and forced them to now evaluate their business models to deal with the imminent competition.

The fact that local retail companies currently dominate most other major markets is this region has amplified alarm that international interest in serving its burgeoning, well-heeled shoppers could prove a real danger to revenues in the future.

It is no secret that the UAE's Nakheel Hypermarkets division is set to sign a deal with an international brand in the very near future.

If its strategy to become the largest shopping mall developer, owner and manager in the Middle East by 2012 involves anchor stores of the strongly veiled brand across the developments, then the magnitude of rivalry to grocers is, again, obvious.

Regardless of the extent of the global influx over the next few years, as franchise veteran Mohammed Alshaya declared at the World Economic Forum in Sharm El Sheikh last month, Arab businesses should take on corporate social responsibility programmes contributing to the long-term growth of the region.

By showing genuine interest in tackling deeper issues from unemployment to carbon footprint reduction to earn customer loyalty, local players with local interests won't even flinch when the big boys arrive.

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