Retailing in Algeria
Value growth in retailing accelerates during 2014
Retailing in Algeria maintained strong growth in 2014 as the current value growth rates recorded during the year were higher than the current value CAGR recorded at industry level over the review period. Higher retail selling prices and the deployment of modern retailing formats in Algeria’s larger cities were the drivers of this positive performance. However, the underdevelopment of large format retail outlets in Algeria’s rural areas compromised growth rates.
Modern store-based retailing channels and internet retailing register positive growth
Store-based retailing remains by far the dominant retailing channel in Algeria. 2014 witnessed consistent improvement in outlet formats as the modernisation of store designs, the development of modern supermarkets and hypermarkets and the expansion of franchising led to flourishing sales for premium products and brands. Algeria’s modern retailers also made improvements in terms of service, which attracted the interest of more consumers and resulted in higher levels of fragmentation. However, these actions remain limited to large cities, with no direct effect being seen on traditional retail channels. 2014 also saw the rapid growth of internet retailing, albeit from a low base as more Algerian people began to use internet retailing more often due to the introduction of 3G mobile telecommunications networks in the country at the end of 2013.
Non-grocery retailers expands faster than grocery retailers in 2014
Non-grocery retailers in Algeria continues to register stronger value growth than grocery retailers. Non-grocery retailers is enjoying faster expansion in terms of outlet numbers and retail selling space in comparison with grocery retailers. The concentration of consumers with high purchasing power in Algeria’s urban areas resulted in strong growth in sales of premium products towards the end of the review period, especially in apparel and footwear specialist retailers and beauty specialist retailers.
Few chains manage to gain share in Algeria’s highly fragmented retailing industry
Value sales in retailing in Algeria continue to be generated mainly by independent outlets in a highly fragmented competitive environment. Few chained outlets belonging to international brands or operated under franchises have been able to gain significant value sales, while the influence of these outlets remains very limited compared with the influence of independent retailers. Large international retail groups are largely absent from retailing in Algeria and the bulk of foreign investment is deployed through franchises with Algerian partners.
Low growth in outlet numbers expected during the forecast period, although value growth is set to accelerate
The number of retail outlets opening in Algeria increased during 2014 in line with the prevailing trends in the industry during 2013 as the country’s urban areas are virtually completely saturated with independent retail outlets. Expectations for the development of retailing in Algeria’s rural areas remain muted because of the lower population density and lower purchasing power among consumers living in these areas. Nonetheless retailing in Algeria is expected to register solid value growth in constant 2014 terms during the forecast period, especially hypermarkets, due to ongoing investment in new outlets, which is set to improve the geographic coverage the general, with outlets set to offer a wider range of products. This is likely to result in a wider range of premium products available, boosting value growth in hypermarkets and retailing over the forecast period.
Retailing in Algeria