2017 has been a significant year for consumers in Egypt. The economy as they’ve known it for years changed with the fateful decision to put the Egyptian pound up for floatation.
The economic (GDP) growth of 3.4% and investment rating outlook remains steady for the immediate future. And early indicators show that the economic reform is starting to yield results, as the currency rebalances after the initial devaluation.
For consumers, however, soaring prices coupled with the three point increase in VAT and rising fuel prices have exerted extreme pressure on wallets, evident in the weaker consumer confidence and sentiment indicators, greater risk of social unrest, and necessitated austere spending measures to cope with their altered reality.
Manufacturers and retailers will need to demonstrate ongoing agility, adaptability and resilience, through relentless change and innovation, to match the shifting consumer needs. Those who are able to retain or regain relevance will be more successful in enduring the transforming landscape to capture profitable growth.
A recent study into Egypt’s consumer outlook identified three major trends around which manufacturers and retailers can develop winning strategies for the country’s evolving marketplace:
More discerning consumers, faced with paying more for less, switch to cheaper, local and loose products. That said, these trends can vary by category. For example, while 40% of consumers said they plan to move to cheaper, local products in food and beverage, the preferred strategy within home care products is to move to loose products (37%).
Consumers also shift to smaller, informal outlets in close proximity. They generally make fewer trips and spend more time searching for better deals. In fact, 35% of Egyptians are shopping less often and 17% have reduced the quantities they’ve purchased.
Modern trade retailers take on a pivotal role in providing affordable, repurposed servings to match consumers’ altered needs. While spend in modern trade outlets has declined, 61% of shoppers choose this channel because of the offers and promotions in packaged goods categories and larger product portfolios.