Potential for 15 to 20 new modern supermarkets and 5 to 10 new shopping centers in Addis Ababa between now and 2018
Sagaci Research, a market intelligence firm dedicated to African markets, released this month two new reports dedicated to Ethiopia: “Grocery retail in Ethiopia (Addis Ababa focus)” and “The Addis Ababa Consumer”.
These reports, leveraging extensive field research in Ethiopia for the past months, highlight an attractive and dynamic market in the early stages of development and should serve as a guidebook for multinational consumer goods and retail companies looking at expanding their operations into Ethiopia.
In Addis Ababa, modern retail is in early stages of development when compared to other sub-Saharan African countries. 8 modern retailers are operating 15 stores (for a total sales area of 15,300 sqm) who represent 0.5% of total grocery spending in the country. All modern retailers in Addis Ababa are mid-sized local companies, operating medium-sized stores with no single store being larger than 1,500 sqm. At this stage, no international retailer is active in the country but Walmart, the world’s largest retailer, is rumored to be considering a market entry with a cash & carry format in 2014. The report also covers the traditional retail structure of the city, highlighting operating models for each channel (mini-mart, cooperatives, gulits and listeros).
The second report, “The Addis Ababa Consumer”, provides an overview of households’ expenditures and consumer behaviors by income classes, including equipment ownership, savings, financial services usage, shopping behaviors as well as mobile, Internet usage and TV preferences. The study, based on a survey of more than 1,000 households, identifies that 24% of households (~200,000 households) have monthly incomes higher than 500 USD, a threshold which makes them attractive consumers in the main product categories (and 10% of households earn more than 1,000 USD per month).
In the coming years, boosted by the country development and the emergence of a middle class, modern grocery retail should develop quickly to reach ~1.5% of total grocery expenditures by 2018, with 15 to 20 new modern supermarkets expected to open in the capital city over the period. Modern supermarkets will also open within malls as Ethiopia remains highly attractive for developers with a potential for 5 to 10 new shopping centers (for an equivalent of 175,000 to 275,000 sqm of GLA – gross leasable area) between now and 2018.
Founded in 2012 by former consultants from The Boston Consulting Group (BCG), Sagaci Research is a market intelligence firm dedicated to African markets. It publishes reports and databases on retail and consumer goods topics, statistical data on household consumption and conducts field studies in 19 countries in Africa.
Photo: Addis Ababa Online