Fitch Egypt Consumer & Retail Report - 2023-06-01 2

Exclusively for the use of Mohamed Yaheya at National Bank of Egypt (S.A.E.).
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Q3 2023
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Egypt
Consumer & R
Retail
etail R
Report
eport
Includes 5-year forecasts to 2027
Exclusively for the use of Mohamed Yaheya at National Bank of Egypt (S.A.E.). Downloaded: 09-Jul-2023
Egypt Consumer & Retail Report | Q3 2023
Contents
Key View............................................................................................................................................................................................ 4
Egypt Consumer Outlook.......................................................................................................................................................................................................... 4
SWOT .................................................................................................................................................................................................. 9
Consumer & Retail SWOT .......................................................................................................................................................................................................... 9
Industry Forecast.........................................................................................................................................................................10
Consumer Spending .................................................................................................................................................................................................................10
Household Characteristics .....................................................................................................................................................................................................19
Consumer Demographics ......................................................................................................................................................................................................23
Market Overview..........................................................................................................................................................................30
Retail Trends .................................................................................................................................................................................................................................30
Consumer & Retail Glossary.....................................................................................................................................................39
Consumer & Retail Methodology............................................................................................................................................43
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Key View
Egypt Consumer Outlook
Key View
• We project consumer spending in Egypt to accelerate in 2023 following tighter monetary policy, elevated inflation and shortages
of foreign currency weighing on the economy in the coming quarters.
• This follows import restrictions in 2022, when consumers could not purchase products even if they were able to afford it, also
weighing on consumer spending.
• While we expect that the IMF programme and Gulf Cooperation Council (GCC) support would help ease financing pressures, risks
persist as authorities still need to make progress on their privatisation to make GCC support materialise.
Consumer Spending Outlook For 2023
We forecast consumer spending to accelerate in 2023, with real household spending (at 2010 prices) projected to grow by 2.1% y-
o-y. This is above -1.0% y-o-y growth in 2022, which indicates that some 2023 growth will be due to base effects and the forecast
acceleration in inflation. Household spending will still be below historical averages, in line with the wider slowdown in the
Egyptian economy, which is set to grow by just 3.8% in 2023 compared to 6.7% in 2022. Egypt's household sector will be
constrained by double-digit inflation rates and tighter monetary policy, which is raising borrowing costs for consumers. Total
household spending (in real terms) will increase marginally to a projected EGP1.86trn in 2023 from EGP1.82trn in 2022.
Pronounced inflationary pressures that Egypt is currently expecting presents significant downside risks to our outlook for consumer
spending, as it weighs on purchasing power. A weakening Egyptian pound is also contributing to soaring inflation in Egypt's import-
dependent economy.
Tighter Monetary Policy Amid Double-Digit Inflation To Weigh On Consumer Spending

Egypt - Total Household Spending, Real % y-o-y (2019-2027)
f = BMI forecast. Source: Central Bank of Egypt, BMI
Insights Into Consumer Spending
Our forecast for continued growth in real consumer spending in Egypt in 2023 is in line with our Country Risk team's forecast that
the domestic economy will grow by 3.8% in real terms, a deceleration from 6.7% in 2022. Household spending in 2023 will be
hampered by the currency weakening, which will make the cost of imports significantly expensive for consumers. With many food
products such as cereals, and meat and poultry imported into Egypt, consumers will have to trade down price points where
government subsidies are not available. This is also against the backdrop of sticky global inflation and higher borrowing costs in
Egypt. The impact of subsidy cuts and austerity measures will begin to wear off over the medium term as the pace of fiscal
consolidation moderates and policy focuses less on subsidy cuts. We expect inflationary pressures to stabilise over the medium
term (2023-2027), which will prove conducive to household spending growth.
We forecast Egypt's tourist arrivals to grow by 27.1% in 2023, slower than 37.6% growth in 2022. This will benefit from its proximity
to Europe, strong growth predicted in the GCC region in 2023, the authorities’ efforts to promote the local tourism sector and its
relative lower prices to other MENA tourist destinations like the UAE, especially as international tourists trade down price points as a
result of the cost of living challenges. We expect Egypt's tourism sector to fully recover to pre-pandemic levels in 2023, helped by
the removal of international travel restrictions. Our prediction is contingent on maintaining political order in the country, as we
believe that the risk of social unrest has increased after the floating of the currency on October 27 2022.
EGYPT'S ECONOMIC OVERVIEW

2023f 2024f
Real GDP, % chg y-o-y 3.8 4.0
Unemployment, % of total labour force 7.3 7.2
Consumer Price Inflation, % y-o-y ave 36.9 16.3
Central Bank Policy Rate, % eop 21.3 12.3
Average Exchange Rate, EGP/USD 34.5 37.1
f = BMI forecast. Source: Central Bank of Egypt, CAPMAS, Ministry of Tourism, BMI
Inflation Outlook
In many markets, inflationary pressures remain elevated, and, while the rate of price changes are slowing, they remain higher than
central banks’ targets and higher than what consumers have grown accustomed to, especially over the past decade. The impact will
not be spread evenly across the different consumer spending segments, with the prices of some components, such as rent; services
and some food items (eg, meat and poultry), remaining stickier and more elevated over 2023. If nominal wages cannot keep up with
these high rates of inflation, consumers will continue to see erosions in their purchasing power. The uneven nature of price
increases will mean that consumers will have to increasingly allocate more of their disposable income towards meeting basic
necessities.
In Egypt, consumer price inflation has been ticking higher in recent months due to rising food and fuel prices. In April 2023 (latest
available data), inflation was recorded at 30.6% y-o-y, significantly above the central banks 5-9% target range and 13.1% y-o-y in
January 2022. The prices of food staples such as wheat and cooking oil have increased in recent months, which is negatively
impacting the purchasing power of Egyptian households. Our Country Risk team forecasts Egypt's consumer price inflation to
average 36.9% y-o-y in 2023, higher still than the 13.9% y-o-y in 2022. Consumer price inflation is projected to moderate to 15.2%
y-o-y over the medium term (2023-2027). This will continue to sap consumer purchasing power and force consumers to prioritise
household essentials.
Rising Inflation Erodes Consumer Purchasing Power

Egypt - Consumer Price Inflation, % y-o-y (2021-2023)
Source: Central Bank of Egypt, BMI
Employment Outlook
Many markets have strong labour markets post-Covid, driven by rapid economic recoveries locally and globally. Governments have
been supportive of local labour markets, resulting in tight markets that have pushed up nominal wages. While inflation is eroding
real gains in incomes, the strong labour market has been a major driver behind the growth in consumer spending, seen over 2022.
However, with many economies now expected to slow or enter recession in 2023, we highlight increasing levels of unemployment
as a risk to our consumer outlook in the short term.
Remittances amounted to USD31.4bn in FY2021/22 in Egypt and will continue to rise in 2023 driven by economic growth in key
source markets, most notably the GCC, as oil prices rally. While balance of payments figures have pointed to a decline in remittance
inflows, we believe that this is only because Egyptian expats avoided remitting money through the official channels due to the
weaker parallel market rate. In this sense, expatriates still sent money through other channels (such as physically carrying it when
visiting). Higher social spending and still strong remittance inflows will only partially offset the erosion of purchasing power of the
poorer segments of the population. However, due to the increase in prices of food and other government-related commitments, we
now expect investment to be slower than we previously forecast, with capital spending plans set to bear the brunt of the
slowdown. This will likely limit employment opportunities in 2023. We expect the country's labour market to weaken slightly, with
unemployment as a percentage of the total labour force projected to average 7.3% in 2023.
Unemployment Increase Marginally In 2023

Egypt - Unemployment rate, % of labour force (2019-2023)
Source: CAPMAS, BMI
Government Support
Many markets around the world have only begun to recover from the worst effects of the Covid-19 pandemic, with some only
recently emerging fully from restrictions. While consumers in Egypt were showing signs of gaining confidence within a re-opened
economy and return of tourists, the surge in inflation, particularly of food, and the weakening currency is weighing on consumer
confidence. Fiscal constraints imposed by the IMF and a heavy debt load will allow the government to add only limited relief to the
economy. The government’s fiscal package, likely agreed on with the IMF, is mostly focused on supporting low income households,
involving the expansion of cash transfer programmes, subsidised consumer loans and grants.
In October 2022, the Egyptian government increased the minimum monthly wage in the public sector from EGP2,000 to EGP3,000
(USD65.2 to USD100.0), alongside paying a bonus of EGP300 (USD10.0) for employees in the public sector and its affiliate
companies, as well as pensions. The additional cash support for lower-income households and the freeze on electricity rates.
Wider Economic Issues
Wider economic challenges facing households and consumers stem from the reopening of economies post-Covid. Inflationary
pressures are driven by demand-pull and cost-push inflation. In an attempt to rein in inflation, Central Banks have hiked their policy
rates at some of the quickest rates ever, making the debt issued during the historically low interest rate period less valuable.
Combined with the tightening of quantitative easing, financial institutions face liquidity issues and severe interest rate risks. While
this is a relatively new issue, ongoing factors, such as labour market dynamics and the Russia-Ukraine conflict, continue to place
downward pressure on our consumer outlook. The economic trajectory of many markets’ post-Covid recovery highlight the risk of
increasing unemployment and its impact on our consumer outlook in the short term. The graphic below summarises these risks to
the outlook over 2023.
Egyptian Households Are Exposed To Global Risks

Global - Risks To Consumer Outlook
Source: BMI
In order to track our analysis of consumer spending in Egypt, please see:
2023 Consumer Outlook
• Egypt 2023 Consumer Outlook: Further Escalations In Inflation Weighs On Spending Power
2022 Consumer Outlook
• Egypt 2022 Consumer Outlook: Household Spending Will Be Supported By Remittance Inflows Against Rising Inflation And
Higher Interest Rates
2021 Covid-19 Impact Assessment
• Egypt Consumer Outlook: Household Spending Remains Strong Despite Slow Vaccination Drive
SWOT
Consumer & Retail SWOT
Strengths Weaknesses
• Egypt is becoming increasingly urbanised, supporting the rise • The majority of Egyptian households, especially in rural areas,
of modern retail formats. are low-income consumers, with average disposable income of
• The Shopping Centres Act, which was passed by the Egyptian less than USD10,000 annually.
government in 2018, eased legislation for the establishment of • Persistently high youth unemployment and low female labour
malls. The law requires that all new real estate projects include a force participation restrict growth in household incomes, giving
commercial area, which makes it more appealing for retail retailers less opportunity to sell non-essential products.
developers to begin new projects. • Little opportunity exists at the top end of the income
• With a population of approximately 112mn, Egypt offers one of distribution, with the number of households earning more than
the largest consumer bases in the region, with huge long-term USD50,000 remaining negligible over our forecast period.
growth potential for retailers. • Many Egyptian households are reliant on remittances, making
• Its large population makes Egypt a premier investment market them vulnerable to external shocks.
for numerous retailers.
• Its popularity with tourists provides opportunities for food
services and hospitality sectors over the medium term.
• Close links with Saudi Arabia and the UAE have resulted in
the proliferation of regional brands.
Opportunities Threats
• Investment in new malls across the country present • Following the Russian invasion of Ukraine, wheat prices have
opportunities for retail expansion to grab a share of growing risen sharply. Being the world's largest wheat importer, this
demand from the expanding middle class. could add to significant inflationary pressures in Egypt in 2023,
• A young population creates opportunities for online retailers weighing on the purchasing power of consumers.
over the medium term, particularly after the pandemic • Currency weakening following the currency float in October
where an increasing number of consumers embraced e- 2022 means imports are increasingly expensive for consumers,
commerce, who are turning to domestic brands instead.
• The country's increasingly affluent and youthful population is • Inflation alongside the depreciated Egyptian pound have
adopting modern spending habits. This will boost demand for stunted growth in incomes and will hinder the population
non-essential items such as household goods, clothing and moving up the income brackets. This will delay growth of the
footwear over the medium-to-long term. affluent middle class.
• The retail property market is set to grow strongly, with • Popular discontent towards the political system could derail the
supermarkets, hypermarkets, department and specialty stores, government's stabilisation attempts.
and modern shopping malls transforming the retail formats • The instability of the region and the country could negatively
available for domestic and international retailers. affect confidence in the industry, particularly if high levels of
• While credit card uptake is among the lowest in the Middle East instability return.
and North Africa region, we expect consumers to benefit from
increasing access to formal financial services over the medium-
to-long term.
Industry Forecast
Consumer Spending
Key View: We project household spending growth to accelerate modestly in Egypt in 2023, due to further rises in the rate of
inflation despite the weakening of the Egyptian pound and the announcement of a USD3.0bn IMF deal. Rising inflation, stemming
from increasing fuel and food prices, is weighing on consumer purchasing power. However, household spending will increase
throughout the medium term (2023-2027), as economic activity increases and inflationary pressures ease, supporting consumer
purchasing power. Essentials will account for around two-thirds of household spending budgets over our medium-term forecast
period. Essential spending will grow at a faster pace than non-essential spending, indicating a shift in purchasing patterns.
Total Household Spending
To strip out the effect of inflation, we project real household spending to grow by 2.1% y-o-y in 2023 to EGP1.9trn (in real terms), an
acceleration from the estimated -1.0% y-o-y in 2022 at EGP1.8trn. The acceleration in spending growth will be due to base effects in
2022, when rising interest rates and the weakened Egyptian pound weighed heavily on consumer purchasing power. Over the
medium term, real household spending will grow at an annual average of 3.4% y-o-y, reaching EGP2.2trn in 2027.
Despite Double-Digit Inflation, Household Spending Will Show Real Growth

Total Household Spending, Real Growth, % y-o-y (2019-2027)
f = BMI forecast. Source: Egypt CAPMAS, BMI
In nominal terms, household spending will reach EGP9.0trn (USD260.9.0bn) in 2023, increasing in local currency terms from
EGP6.5trn (USD337.7bn) in 2022. Over the medium term (2023-2027), we forecast household spending to grow by an annual
average of 18.1% y-o-y (in nominal terms) to reach EGP14.9trn (USD391.9bn) at the end of our forecast period in 2027, driven by
the high levels of inflation.
TOTAL HOUSEHOLD SPENDING (EGYPT 2021-2027)

Indicator 2021 2022 2023f 2024f 2025f 2026f 2027f
Total household spending, EGPbn 5,730.6 6,471.8 8,996.6 10,687.3 12,057.5 13,390.5 14,873.9
Total household spending, USDbn 366.30 337.77 260.86 304.09 348.62 379.57 413.35
Total household spending, EGP % y-o-y 13.96 12.93 39.01 18.79 12.82 11.06 11.08
Total household spending, USD % y-o-y 14.80 -7.79 -22.77 16.57 14.64 8.88 8.90
Total household spending, EGPbn, 2010 prices, % y-o-y 8.76 -0.97 2.11 2.49 4.12 4.06 4.08
Since the start of 2021, inflationary pressures have been rising in many markets globally, as base effects, higher commodity prices
and supply chain challenges have created localised shortages. On the demand side, there has been pent-up demand for products
and services that were limited during the pandemic years. The Ukraine-Russia conflict has also significantly impacted the global
supply prices of key commodities, such as oil and gas, fertiliser, wheat, corn, and barley. The commodity price increases are already
feeding through into higher consumer prices, which will continue in 2023. We believe that rising consumer price inflation is a key
risk to consumer spending in 2023, as it has the potential to erode purchasing power and shift spending away from discretionary
spending. As a result, nominal growth rates across a number of our key consumer spending indicators will be factoring in
heightened costs, with inflation driving the growth outlook. We project that this was the case for most markets in 2022 and will be
the case for a majority of markets in 2023.
In Egypt, consumer price inflation has been ticking higher in recent months due to rising food and fuel prices. In April 2023 (latest
available data), inflation was recorded at 30.6% y-o-y, significantly above the central banks 5%-9% target range and 13.1% y-o-y in
January 2022. The prices of food staples such as wheat and cooking oil have increased in recent months, which is negatively
impacting the purchasing power of Egyptian households. Our Country Risk team forecasts Egypt's consumer price inflation to
average 36.9% y-o-y in 2023, higher still than the 13.9% y-o-y in 2022. Consumer price inflation is projected to moderate to 15.2%
y-o-y over the medium term (2023-2027). This will continue to sap consumer purchasing power and force consumers to prioritise
household essentials.
Rising Inflation Is Weighing On Consumer Purchasing Power in 2023

Egypt - Consumer Price Inflation, % y-o-y avg (2019-2027)
Inflationary pressures have been rising in many markets globally since the start of 2021, as base effects, higher commodity prices
and supply chain challenges create localised shortages. On the demand side, there has been pent-up demand for products and
services that were limited during the pandemic years. The Russia-Ukraine conflict, which began in February 2022, has significantly
impacted the global price of key commodities, such as oil and gas, fertiliser, wheat, corn, barley, and other soft commodities. The
commodity price increases have meant higher consumer prices, and this will continue over H123 before settling at a higher
level. We expect elevated consumer price inflation continues to be a key risk to consumer spending over 2023, as it erodes
purchasing power and shifts spending from discretionary spending. As a result, nominal growth rates across a number of our key
consumer spending indicators will be factoring in heightened costs, with inflation driving the growth outlook. We expect that this
will be the case for the majority of markets over 2023.
Significant Demand-Side Risks Exist

Risks To Outlook
Source: Fitch Solutions
Essential And Non-Essential Spending
The first place we believe inflation will be most noticeable is essential and non-essential spending allocations. High inflation will
inflate nominal growth rates in both categories, but as high prices put pressure on household budget constraints, we believe
household spending allocations will shift away from the less vital non-essential spending categories (such as recreation and culture
or restaurant and hotels) into more essential spending categories, such as food and non-alcoholic drinks or utilities, especially as
these categories experience their own inflation, causing households to prioritise them more.
Essential spending (food and non-alcoholic drinks, housing and utilities, clothing and footwear, transport and communication)
remains the dominant segment of household spending in Egypt, driven by the large share of low-income households in the
country. Over the next five years, household spending allocations for essentials will see consumers shift their spending further into
this category. Proportionally, spending on essential items will edge slightly higher over the medium term, reaching 67.5% of overall
spending in 2027, up from 66.9% in 2023. This development will be driven by eroding real incomes across all income brackets,
deteriorating consumers ability to purchase products, choosing instead to allocate more of their budgets to necessities.
Essentials Focus In Consumer Spending

Essential & Non-Essential Spending (2017-2027)
Spending on essential items is forecast to grow from EGP6.0trn (USD174.6.0bn) in 2023 to EGP10.0trn (USD279.0bn) by the end of
2027. However, the percentage share of spending on essentials will edge higher over the next five years (as noted above).
We maintain the view that the food and non-alcoholic drinks sector will contribute the most to the relative increase in essentials
spending. Egypt's economy is import-dependent and this reliance is particularly strong with food imports like cereals, and meat and
poultry. As the Egyptian pound continues to weaken in the short term, we expect an increase in the proportion of household
spending on the food and drinks category. While the government offers subsidies to low-income families for flat bread, there is not
an equivalent subsidy for meat and poultry. While food and non-alcoholic drinks spending will increase from 34.8% of total
household spending in 2023 to 35.4% by 2027, we note it is down from 37.7% in 2013. The development will continue to expand as
wealth levels take time to recover from elevated inflation, high interest rates and a weakened currency. We believe many Egyptian
households will not be able to allocate spending in other non-essential categories, such as personal care and health, putting food
and non-alcoholic drinks spending as the outperformer across all categories over our forecast period, with an annual growth rate of
19.0% y-o-y to EGP5.3trn (USD138.8bn) by 2027.
ESSENTIAL AND NON-ESSENTIAL SPENDING (EGYPT 2021-2027)

Indicator 2021 2022 2023f 2024f 2025f 2026f 2027f
Essentials spending, EGPbn 3,875.4 4,294.9 6,022.3 7,178.3 8,114.6 9,025.6 10,039.5
Non-Essentials spending, EGPbn 1,855.2 2,176.9 2,974.3 3,509.0 3,942.9 4,365.0 4,834.4
Essentials spending, % total 67.63 66.36 66.94 67.17 67.30 67.40 67.50
Non-Essentials spending, % total 32.37 33.64 33.06 32.83 32.70 32.60 32.50
Essentials spending, USDbn 247.71 224.16 174.62 204.25 234.62 255.84 279.00
Non-Essentials spending, USDbn 118.59 113.61 86.24 99.84 114.00 123.73 134.35
Essentials spending, EGP % y-o-y 11.02 10.83 40.22 19.19 13.04 11.23 11.23
Non-Essentials spending, EGP % y-o-y 20.63 17.34 36.63 17.98 12.36 10.71 10.75
While spending on non-essentials will make gains over the forecast period, they will not increase their share of spending as some
shifts in consumer spending habits take place. Furnishing and home spending growth will be the strongest performer within non-
essentials over the medium term (2023-2027), growing at an average of 18.7% annually to 2027. The gains in this sub-sector are
largely the result of increased demand for housing, as urbanisation rates grow rapidly, meaning greater demand for urban jobs,
housing and home spending. These dynamics mean that future Egyptian governments will need to provide even more to its
citizens or enable the more involvement from the private sector. A failure to achieve this would keep unemployment high and leave
many trapped in poverty.
Food, Drink And Tobacco
Outlook For 2023
In 2023, households are forecast to spend EGP3.1trn (USD90.7bn) on food and non-alcoholic drinks, with spending growing by
41.8% y-o-y. This is a very sharp increase from the growth rate of 8.2% in 2022 as a result of further increases in food
inflation. Household spending in 2023 will be hampered by the currency weakening, which will make the cost of imports
significantly expensive for consumers. With many food products such as cereals, and meat and poultry imported into Egypt,
consumers will have to trade down price points where government subsidies are not available.
Structural Trends
We forecast food and non-alcoholic drinks spending to be the strongest growing segment in this category, growing at an average
annual rate of 19.0% through to 2027. Food spending will account for roughly 96% of total food and non-alcoholic drinks spending,
reaching EGP5.3trn in 2027. Food spending will continue to record strong growth rates as more consumers move from unpackaged
food products to packaged food, driven by urbanisation and investment in Egypt's mass grocery retail sector. This is also against the
backdrop of sticky global inflation and higher borrowing costs in Egypt. The impact of subsidy cuts and austerity measures will begin
to wear off over the medium term
Spending on alcoholic drinks and tobacco is forecast to grow by a projected 16.9% a year over the medium term, reaching
EGP671.3bn (USD18.7bn) in 2027, which is an increase from EGP416.1bn (USD12.1bn) in 2023. Spending on alcoholic drinks
accounts for approximately a 10th of total spending on alcohol and tobacco products in Egypt. It is important to note that while
many Egyptians do not drink in public, some purchase alcohol to drink privately at home. In the past, there have been bans placed
on alcohol consumption in the country. In 2013, plans were announced to ban the sale of alcohol, a move pushed forward by
Islamist hardliners in the government; however, these proposals never materialised. We also highlight that Egypt has a significant
Christian (mostly Coptic) population, who do not have a religious ban on alcohol consumption.
FOOD AND DRINKS (NON-ALCOHOLIC, ALCOHOLIC AND TOBACCO) SPENDING (EGYPT 2021-2027)
Indicator 2021 2022 2023f 2024f 2025f 2026f 2027f
Food and non-alcoholic drinks spending,

2,038.91 2,206.03 3,127.52 3,743.68 4,242.51 4,727.75 5,268.02
EGPbn
Food spending, EGPbn 1,962.18 2,121.98 3,012.26 3,605.31 4,085.43 4,552.47 5,072.48
Non-alcoholic drinks spending, EGPbn 76.73 84.05 115.14 138.20 156.87 175.02 195.24
Alcoholic drinks and tobacco spending, EGPbn 257.72 306.85 416.12 489.45 548.96 606.87 671.26
Alcoholic drinks spending, EGPbn 48.45 61.06 79.18 93.30 104.76 115.91 128.30
Tobacco spending, EGPbn 209.27 245.79 336.94 396.15 444.20 490.97 542.96
Food and non-alcoholic drinks spending, EGP

7.56 8.20 41.77 19.70 13.32 11.44 11.43
% y-o-y
Food spending, EGP % y-o-y 7.50 8.14 41.95 19.69 13.32 11.43 11.42
Non-alcoholic drinks spending, EGP % y-o-y 9.30 9.53 36.99 20.03 13.51 11.58 11.55
Alcoholic drinks and tobacco spending, EGP %

23.47 19.06 35.61 17.62 12.16 10.55 10.61
y-o-y
Alcoholic drinks spending, EGP % y-o-y 32.64 26.03 29.68 17.83 12.28 10.64 10.69
Tobacco spending, EGP % y-o-y 21.52 17.45 37.09 17.57 12.13 10.53 10.59
Food and non-alcoholic drinks spending,

130.33 115.13 90.68 106.52 122.66 134.01 146.40
USDbn
Alcoholic drinks and tobacco spending, USDbn 16.47 16.01 12.07 13.93 15.87 17.20 18.65

72,590.10 77,019.15 107,102.61 125,733.09 139,744.02 152,774.20 167,046.02
per household
Alcoholic drinks and tobacco spending, EGP

9,175.40 10,713.02 14,250.14 16,438.23 18,082.20 19,610.65 21,285.34
per household

18,660.69 19,875.91 27,746.79 32,700.41 36,486.69 40,045.66 43,959.48
per capita
Alcoholic drinks and tobacco spending, EGP

2,358.71 2,764.65 3,691.75 4,275.22 4,721.20 5,140.41 5,601.41
per capita
Clothing And Footwear
Outlook For 2023
We forecast spending on clothing and footwear to grow, in nominal terms, by 37.3% y-o-y in 2023, reaching EGP506.7bn
(USD14.7bn). While this is a sharp increase from growth of 14.4% in 2022 due to inflation increases, clothing and footwear will hold
up well in light of the challenges in 2023 in real terms. Egypt is a textiles hub for low- to mid-range products in this sub-segment,
importing luxury items from abroad. As disposable incomes experience limited real gains in 2023 and imports become more
expensive, we expect consumers will trade down price points and consume more locally crafted clothes and footwear, supporting
household spending in this category.
Structural Trends
We project clothing and footwear spending to reach EGP827.6bn (USD23.0bn) in 2027, representing an average annual growth rate
of 17.5% y-o-y. The country's youthful and increasingly urbanised population will be the main driving force behind demand for
clothing and footwear over the coming few years. Popular fast-fashion retailers, such as H&M, LC Waikiki and DeFacto, are already
established in the country, while modern shopping malls continue to be developed in order to attract the attention of international
brands that may wish to gain a foothold in the market. In April 2022, Mazaya Developments started enabling works on the
EGP1.0bn (USD52.1mn) Rook Mall in the New Administrative Capital, Egypt. The 13-storey commercial project, designed by local
firm Archrete, will cover more than 2,632sq m and will include offices and shops. Construction was scheduled to start in Q222, with
completion expected in 2024.
The Shopping Centres Act, which was passed by the government in 2018, eased legislation for the establishment of malls. The law
requires that all new real estate projects include a commercial area, which makes it more appealing for retail developers to begin
new projects. Egypt is characterised as a high consumer market, where Egyptians like to go out and enjoy shopping and dining. This
law is beneficial to the private sector. With a mixture of Egyptian and international brands already in the country or coming in, it is
creating healthy competition, which is a model based on bringing people together in office space, retail or communities. This is to
encourage consumers to substitute the traditional, informal retail formats that are prevalent in Egypt currently, particularly in non-
urban areas. An increase in formalised retail outlets creates opportunities for mall developments.
CLOTHING AND FOOTWEAR SPENDING (EGYPT 2021-2027)

Indicator 2021 2022 2023f 2024f 2025f 2026f 2027f
Clothing and footwear spending, EGPbn 322.75 369.09 506.72 598.98 673.80 746.61 827.58
Clothing spending, EGPbn 260.34 296.98 408.24 482.81 543.30 602.14 667.60
Footwear including repair spending, EGPbn 62.42 72.11 98.49 116.17 130.51 144.46 159.98
Clothing and footwear spending, EGP % y-o-y 16.03 14.36 37.29 18.21 12.49 10.80 10.85
Clothing spending, EGP % y-o-y 15.62 14.07 37.46 18.27 12.53 10.83 10.87
Footwear including repair spending, EGP % y-o-y 17.80 15.53 36.58 17.95 12.34 10.69 10.74
Clothing and footwear spending, USDbn 20.63 19.26 14.69 17.04 19.48 21.16 23.00
Clothing spending, EGP per household 9,268.64 10,368.38 13,980.11 16,215.46 17,895.63 19,457.91 21,169.37
Footwear including repair spending, EGP per

2,222.19 2,517.60 3,372.75 3,901.59 4,298.83 4,668.15 5,072.89
household
Clothing spending, EGP per capita 2,382.68 2,675.71 3,621.79 4,217.28 4,672.49 5,100.37 5,570.89
Footwear including repair spending, EGP per capita 571.26 649.70 873.77 1,014.72 1,122.41 1,223.63 1,334.97
Household Goods
Outlook For 2023
Spending growth on household goods in nominal terms will rise sharply slightly in 2023, amid higher inflation. We forecast spending
on this category to grow by 46.0% y-o-y, to a total of EGP191.2bn (USD5.5bn) in 2023. In real terms, we forecast growth in this sub-
segment to decline during the economic challenges despite its outperformance during the first currency float in 2017. In 2020 and
2021, demand for household goods was robust as the economy re-opened. For now, consumers are putting off furnishing
purchases in response to limited real gains in disposable incomes in the short term.
Structural Trends
We forecast expenditure on household goods to grow by an annual average of 19.6% a year throughout our 2023-2027 forecast
period, rising to EGP320.5bn (USD8.9bn) in 2027. Of this, the largest proportion will be spent on household appliances, with
spending expected to reach EGP99.8bn in 2027. AV, camera and computer spending will record the strongest growth over
2023-2027, averaging 25.2% a year. Egyptians increasingly aspire to have electronic devices in their homes as the population is one
of the youngest in the Middle East and North Africa region. This drives spending growth and presents significant opportunities for
retailers in this segment. The household goods market remains unsaturated, although retail giants, such as IKEA, have already
established themselves in the country. This will pose challenges to domestic retailers, who will struggle to compete on price or
product range.
HOUSEHOLD GOODS SPENDING (EGYPT 2021-2027)

Indicator 2021 2022 2023f 2024f 2025f 2026f 2027f
Household goods spending, EGPbn 123.03 130.95 191.21 228.41 258.55 287.87 320.50
Furniture and furnishings spending, EGPbn 25.21 27.28 40.20 47.85 54.05 60.08 66.80
Household textiles spending, EGPbn 22.24 23.41 34.83 41.27 46.50 51.58 57.24
Household appliances spending, EGPbn 38.24 41.00 59.65 71.20 80.57 89.68 99.81
Glass, tableware and utensils spending, EGPbn 9.68 9.64 15.32 18.09 20.34 22.53 24.97
Home & garden tools/equipment spending, EGPbn 9.19 11.49 14.08 16.80 19.00 21.14 23.53
AV, camera and computer spending, EGPbn 13.68 12.10 19.19 23.95 27.80 31.55 35.72
Toys, sports, gardens and pets spending, EGPbn 4.80 6.02 7.95 9.24 10.29 11.30 12.44
Household goods spending, EGP % y-o-y 5.36 6.44 46.02 19.45 13.20 11.34 11.34
Furniture and furnishings spending, EGP % y-o-y 7.59 8.22 47.35 19.04 12.96 11.16 11.17
Household textiles spending, EGP % y-o-y 3.98 5.29 48.74 18.51 12.66 10.93 10.97
Household appliances spending, EGP % y-o-y 6.34 7.23 45.49 19.37 13.15 11.31 11.30
Glass, tableware and utensils spending, EGP % y-o-y -2.40 -0.41 58.90 18.13 12.43 10.76 10.81
Home & garden tools/equipment spending, EGP % y-o-y 34.46 25.07 22.49 19.32 13.12 11.28 11.28
AV, camera and computer spending, EGP % y-o-y -12.83 -11.54 58.65 24.76 16.09 13.48 13.22
Toys, sports, gardens and pets spending, EGP % y-o-y 35.12 25.40 31.99 16.24 11.32 9.89 10.02
Household goods spending, USDbn 7.86 6.83 5.54 6.50 7.48 8.16 8.91
Household goods spending, EGP per household 4,380.14 4,571.74 6,548.07 7,671.10 8,516.27 9,302.33 10,162.94
Household goods spending, EGP per capita 1,126.00 1,179.80 1,696.39 1,995.09 2,223.57 2,438.36 2,674.46
Personal Care And Effects
Outlook For 2023
In 2023, we forecast personal care and effects spending to expand by 38.2% y-o-y. We forecast personal care and effects spending
in nominal terms to amount to EGP249.6bn (USD7.2bn) in 2023.
Structural Trends
Personal care and effects spending is forecast to grow by an average of 16.9% y-o-y annually over our 2023-2027 forecast period,
taking spending to EGP393.6bn (USD10.9bn) by 2027. The greater proportion of spending on personal care and effects is
accounted for by personal care products, forecast to be worth EGP334.5bn by 2027, while the personal effects segment is expected
to be worth EGP59.1bn in the same year. We hold our view that growing demand for natural products is driving personal care
products in Egypt, with many smaller, local manufacturers having launched 100% natural skin care and hair care products. We see a
similar trend playing out in make-up, where consumers are increasingly interested in natural ingredients.
PERSONAL CARE AND EFFECTS SPENDING (EGYPT 2021-2027)

Indicator 2021 2022 2023f 2024f 2025f 2026f 2027f
Personal care and effects spending, EGPbn 153.04 180.62 249.60 290.97 324.58 357.29 393.64
Personal care products spending, EGPbn 129.26 149.69 209.74 245.57 274.69 303.03 334.52
Personal effects products spending, EGPbn 23.78 30.93 39.86 45.39 49.89 54.26 59.12
Personal care and effects spending, EGP % y-o-y 21.75 18.02 38.19 16.57 11.55 10.08 10.17
Personal care products spending, EGP % y-o-y 18.23 15.81 40.11 17.09 11.86 10.32 10.39
Personal effects products spending, EGP % y-o-y 45.21 30.07 28.87 13.87 9.90 8.77 8.96
Personal care and effects spending, USDbn 9.78 9.43 7.24 8.28 9.38 10.13 10.94
Personal care and effects spending, EGP per household 5,448.57 6,306.13 8,547.61 9,772.27 10,691.38 11,545.70 12,482.23
Personal care and effects spending, EGP per capita 1,400.66 1,627.39 2,214.41 2,541.55 2,791.48 3,026.40 3,284.80
Tourism Spending
Despite Egypt's popularity as a tourism destination, it is not known as a retail tourism hub with its beaches and significant historical
and cultural attractions remaining the leading drivers of the tourism industry. However, several terrorist attacks on tourism
infrastructure such as hotels and transport networks have negatively impacted tourist arrivals in the past. After a significant decline
in arrivals over 2015-2016, we saw significant growth in the number of inbound arrivals over 2017-2019. The Covid-19 pandemic
proved another blow to the tourism industry, with arrivals into Egypt estimated to have contracted by 71.8% y-o-y in 2020 to 3.7mn
arrivals, down from 13.0mn in 2019. In 2023, we expect the market to continue to recover as source markets begin to allow greater
outbound tourism. By 2027, we forecast total arrivals to reach 19.0mn, increasing from 14.0mn in 2023, representing an average
annual growth rate of 11.5% y-o-y.
The sanctions imposed on Russia by the UK, EU, US and their allies in response to its invasion of Ukraine in February 2022 present a
downside risk to Egypt's arrivals in 2023, as Russia is a key source market. The fall in the Russian ruble and eroding purchasing
power of Russian households could prevent them from travelling to Egypt over the coming quarters and years. In August 2022,
Aeroflot resumed flights to the Red Sea for the first time since 2015.
Household Characteristics
Key View: We project household incomes to increase in 2023 despite slowdowns in economic growth, pushed by inflation. Over
the medium term (2023-2027), we project household income growth to outpace inflation. This will serve to keep consumer
spending growth level in real terms over our forecast period. We forecast the proportion of households with disposable incomes of
USD10,000+ to more than triple by 2027, indicating the scale of the soaring inflation and the rising cost of food. This presents some
limited opportunities for spending on non-essentials beyond the short term.
Latest Updates
• We forecast Egypt's annual household disposable income to average EGP121,400 (USD3,518) in 2023, increasing from
EGP91,400 (USD4,768) in 2022. Much of the increase in domestic currency will be inflation driven.
• Household incomes will continue to increase over the remainder of our 2023-2027 forecast period, reaching EGP191,900
(USD5,331) in 2027.
• In October 2022, the Egyptian government increased the minimum monthly wage in the public sector from EGP2,000 to
EGP3,000 (USD65.4 to USD100.0, along with paying a bonus of EGP300 (USD10.0). The additional cash support for lower-
income households and the freeze on electricity rates, implemented in June and September 2022, will be extended by six
months until June 2023.
• The number of households with disposable incomes of more than USD5,000 will fall from 34.2% in 2022 to 15.4% of total
households in 2023.
• Little opportunity exists at the top end of the income distribution, with the number of households with disposable incomes of
more than USD50,000 remaining negligible over our forecast period, reaching 0.03% of total households in 2027.
• The country's total number of households will expand considerably over our medium-term forecast period, growing from
29.2mn in 2023 to 31.5mn by 2027.
Purchasing Power And Demographic Trends

Household Income Breakdown (2023-2027)
f = BMI forecast. Source: National sources, BMI
2023 Income Outlook
We forecast Egypt's annual household disposable income to average EGP121,400 (USD3,518) in 2023, increasing from EGP91,400
(USD4,768) in 2022. Much of the increase in the domestic currency will be inflation driven, meaning there will be no real gains
expected in 2023. Household incomes will continue to increase by an annual average of 16.3% y-o-y over the remainder of our
2023-2027 forecast period, reaching EGP191,900 (USD5,331) in 2027. Household income growth will outpace consumer price
inflation, which we forecast to average 15.2% y-o-y over the 2023-2027 forecast period. This means that consumers will see their
incomes increasing in real terms over our forecast period despite barriers to real growth in the short term, which bodes well for
consumer spending in the medium term.
Improvements To Real Wage Gains For Egyptian Consumers Beyond 2023

Egypt - Disposable Incomes & Consumer Price Inflation (2018-2027)
e/f = BMI estimate/forecast. Source: National statistics, BMI
Structural Trends
The overall increase in the number of households in Egypt is in line with the growth trajectory of the country's population, with the
total number of households expected to grow from 29.2mn in 2023 to 31.5mn by 2027. The increase in the number of households
gives retailers an opportunity to build customer loyalty as they obtain greater access to new customers.
The gap between the country's wealthiest and the poorest will very gradually narrow, with growth in overall household incomes over
the next five years. In March 2019, the government raised the country’s minimum wage to EGP2,000 (USD65.4) a month from
EGP1,200 (USD39.3), while also increasing pensions by 15%. Furthermore, the National Wage Council announced in June 2021 the
raising of the minimum wage of private-sector employees from EGP2,000 (USD65.4) to EGP2,400 (USD78.6) per month effective
January 2022. In October 2022, the Egyptian government increased the minimum monthly wage in the public sector from
EGP2,000 to EGP3,000 (USD65.4 to USD100), alongside paying al bonus of EGP300 (USD10) for employees in the public sector and
its affiliate companies, as well as pensions. This will provide some support to households at the lower end of the income distribution
during the current crisis and will boost consumption beyond the short term.
In 2023, we expect the inflation crisis and subsequent floating of the Egyptian pound will have adverse effects on the income
distribution. We forecast the proportion of households with disposable incomes of USD10,000+ to decrease from 4.5% in 2022 to
1.6% in 2023, indicating the scale of the soaring inflation and rising cost of food. While this will improve over the medium term to
6.3% in 2027, it presents limited opportunities for spending on non-essentials in the short term.
If the Egyptian economy can navigate the current crisis, Egypt's middle class has the potential to become the fastest growing in the
world, bearing in mind the size of the country's population. This growth in household incomes will attract new players to the retail
market, and this will help consolidate and modernise the industry. We are already seeing huge potential in the e-commerce sector
in this market. Brand penetration is currently low in Egypt and the retail sector has potential for strong long-term growth.
Egypt's economic reform measures of the past years, which include the removal of various subsidies and the floating of the
Egyptian pound, have had a negative effect on low-income consumers, with the amount of people living in poverty or extreme
poverty rising in 2017, although it has since started to gradually improve. According to the UNs 2020 Human Development Report,
nearly a third of Egyptians live below the poverty line, which continues to limit opportunities for retailers in the country. The high
number of low-income households (households with an annual disposable income of USD5,000 or less) is why over two-thirds
of household spending goes towards essentials, such as food and drink, and housing and utilities, rather than luxury goods and
discretionary purchases. Over our forecast period (2023-2027), we forecast the proportion of households with disposable income of
USD5,000 or less to fall from 84.6% in 2023 to 56.3% in 2027, as economic activity increases and unemployment falls, supporting
income growth
Those earning high incomes are often employed in the banking and insurance industries, or in technical or managerial roles in the
petroleum industry. The areas that have the most highly-paid individuals are Cairo (the financial hub) and Alexandria (which benefits
from trade and shipping services). Retailers would ideally target these areas if they are involved in the sale of non-essential luxury
goods, with modern shopping malls being the ideal destination.
HOUSEHOLD INCOME DATA (EGYPT 2020-2027)

Indicator 2020e 2021e 2022e 2023f 2024f 2025f 2026f 2027f
Households, '000 27,344.8 28,088.0 28,642.6 29,201.2 29,774.8 30,359.1 30,946.0 31,536.3
Households, % y-o-y 2.5 2.7 2.0 2.0 2.0 2.0 1.9 1.9
Average working adults per household 3.4 3.4 3.3 3.3 3.2 3.2 3.1 3.1
Gross Income, per household, EGP 84,495 89,808 103,587 137,590 161,525 180,184 197,913 217,529
Gross Income, per household, USD 5,361 5,740 5,406 3,989 4,595 5,209 5,610 6,045
Gross Income, per capita, EGP 24,960 26,586 30,805 41,215 48,544 54,256 59,684 65,690
Gross Income, per capita, USD 1,583 1,699 1,607 1,195 1,381 1,568 1,691 1,825
Disposable Income, per household, EGP 74,526 79,212 91,366 121,357 142,468 158,925 174,563 191,865
Disposable Income, per household, USD 4,729 5,063 4,768 3,518 4,053 4,595 4,948 5,331
Disposable Income, per capita, EGP 22,015 23,449 27,170 36,353 42,816 47,855 52,643 57,940
Disposable Income, per capita, USD 1,396 1,498 1,418 1,054 1,218 1,383 1,492 1,610
Tax and social contributions, % of gross income 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8
Tax and social contributions, per capita, EGP 2,944.85 3,136.74 3,634.48 4,862.73 5,727.33 6,401.31 7,041.73 7,750.30
Tax and social contributions, per capita, USD 186.9 200.5 189.7 141.0 163.0 185.1 199.6 215.4
Households '000 Disposable Income USD5,000+ 9,165.3 10,946.2 9,800.8 4,484.4 6,804.5 9,548.7 11,552.0 13,785.8
Households '000 Disposable Income USD10,000+ 1,222.6 1,558.1 1,295.9 470.4 767.9 1,184.8 1,535.4 1,991.3
Households '000 Disposable Income USD50,000+ 5.1 6.5 5.2 1.8 2.9 4.4 5.7 7.3
Households Disposable Income USD5,000+, % total

33.5 39.0 34.2 15.4 22.9 31.5 37.3 43.7
households
Households Disposable Income USD10,000+, %

4.5 5.5 4.5 1.6 2.6 3.9 5.0 6.3
total households
Households Disposable Income USD50,000+, %

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
total households
e/f = BMI estimate/forecast. Source: National sources, BMI
Consumer Demographics
Key View: Egypt's consumer demographics are highly attractive to consumer-facing firms. The country boasts the largest
consumer market in the Middle East, including a large and growing young adult population, which bodes well for sales of innovative
and modernised consumer products and services.
Demographic Trends
Looking at the demographic trends of a market gives insight into where future opportunities will emerge for consumer-facing
industries. These are generally longer-term trends, taking place over multiple decades rather than our typical five-year forecast
period. This section provides analysis, charts and data up to 2050. The demographic trajectories of Egypt are analysed to enable a
better understanding of the long-term population shifts and their impact from a consumer perspective.
Population Size
Egypt holds the largest consumer market among its Middle Eastern peers (Iran, Oman and Lebanon), with a population size of
107.5mn in 2020. The country will benefit from rapid population growth over the long term, with the population expected to reach
160.3mn by 2050. Its young consumer base will boost population growth, increasing live birth rates to 2.6mn by 2050, the highest
among its regional peers.
Population Growth
Egypt, Iran, Lebanon & Oman - Total Population, mn (2015-2050)
e/f = Fitch Solutions estimate/forecast. Source: UN, Fitch Solutions
Generational Breakdown And Spending Patterns
Spending patterns are largely determined by the age and the generation of the consumer. Typically, consumers will see their
disposable incomes grow as they age, meaning that higher-value items are more typically bought by older consumers. Similarly,
spending patterns are also defined by the consumer's generational grouping, with each group spending on categories they deem
more important. The graphic below highlights the main spending patterns by generation.
Spending Patterns Of The Different Generations

Breakdown Of Generations
Source: BMI
• Simply put, larger population sizes translate into larger consumer markets for companies to target.
• If a population continues to grow over our 2050 forecast period, it sends a positive signal to investors, as their target market is
expanding.
• If a population shrinks, this poses a potential risk. This is particularly so if the shrinking is precipitated by a 'brain drain' among
young, educated adults - an important slice of the population.
POPULATION (EGYPT 2015-2050)

Geography Indicator 2015 2020 2025f 2030f 2035f 2040f 2045f 2050f
Egypt Population, mn 97.72 107.47 116.28 125.15 134.18 143.42 152.26 160.34
f = BMI forecast. Source: UN, BMI
Adult Population Trends
Companies looking to enter or expand in the Egyptian market will benefit from the country's large, young consumer population. We
forecast the young adult population (aged 20-39 years old) to increase from 33.8mn to 48.7mn between 2020 and 2050. However,
its proportion of the total population will decrease slightly from 31.5% in 2020 to 30.4% by 2050, on the back of rising middle-aged
(aged 40-64 years old) and pensionable populations. By 2050, the middle-aged population will make up 26.8% of the total
population, reaching a total of 42.9mn, up from 23.4mn in 2020. The country's pensionable population will increase from 5.1mn in
2020 to 15.7mn in 2050, although this group will still only account for 9.8% of the total population over the long term. Overall, the
adult population will continue to be the dominant age group in Egypt, growing from 58.0% of the total population in 2020 to 67.0%
by 2050.
Adult Population Trends

Adult Population Trends (2000-2050)
• We have broken down the adult population into three groups: young adults (20-39 years old), middle-aged (40-64 years old) and
pensionable population (65-plus years old). We have used their percentages of the total population to determine which age
group will account for a larger or smaller share of the total population by 2050. This does not necessarily mean that a group will
decline in total numbers if the percentage falls, just that other groups are growing faster.
• Young Adults (Trendsetters): alcohol, technology (latest devices, e-commerce), fashion, personal care, restaurants, recreation,
furnishing and home (lower-end), transport (public, taxis, second-hand cars), experiences (holidays, unique/shareable activities),
education, utilities, sporting goods.
• Middle Aged (Premiumisation): spirits, personal effects, restaurants, recreation and culture, health, transport (premium
brands, larger vehicles, new vehicles), financial products (life/home insurance), furnishing and home (antiques, renovations),
hotels (domestic), education, utilities, garden products.
• Pensionable Population (Retiring, Out Of Workforce): health, financial, traditional food and drink, convenience, culture,
holidays, property, care services.
YOUNG ADULT/MIDDLE-AGED/PENSIONABLE POPULATION (EGYPT 2015-2050)

Indicator 2015 2020 2025f 2030f 2035f 2040f 2045f 2050f
Population, 20-39 yrs, total, '000 31,716.4 33,797.4 35,390.7 37,177.5 40,992.8 44,545.5 47,047.5 48,678.0
Population, 20-39 yrs, % total 32.5 31.4 30.4 29.7 30.5 31.1 30.9 30.4
Pensionable popn, % of total 4.4 4.7 5.2 5.9 6.7 7.5 8.5 9.8
Pensionable pop., total, '000 4,264.6 5,060.2 6,001.1 7,406.9 8,994.6 10,748.8 12,989.3 15,721.2
Baby, Child And Teenage Population
Egypt's youth population (those under the age of 20) will grow in absolute terms over 2020-2050, although it will fall in percentage
terms owing to the expansion of the older generations. Overall, the youth population will grow from 45.2mn in 2020 to 53.0mn by
2050, but fall from 42.1% to 33.1% of the population.
The teenage population (aged 15-19 years) will see the largest gains in total numbers, with an additional 3.2mn people in the age
group, growing from 9.5mn to 12.7mn between 2020 and 2050. The babies and toddlers group, aged 0-4 years, will increase only
gradually, reaching 13.3mn in 2050, up from 12.5mn in 2020, although it will be the second largest group in the youth population
range. Young children will reach a total number of 13.5mn in 2050, putting them as the largest group in the young population
range, up from 12.6mn in 2020. Finally, the pre-teenager group will increase from 10.5mn in 2020 to 13.4mn in 2050.
Babies, Children And Teenagers Population Trends

Babies, Children & Teenagers Population Trends (2000-2050)
• We have broken down the non-adult population into four groups: babies (0-4 years old), children (5-9 years old), pre-teenagers
(10-14 years old) and teenagers (15-19 years old). We have used their percentages of the total population to determine which
age group will account for a larger or smaller share of the total population by 2050. This does not necessarily mean that a group
will decline in total numbers if the percentage falls, just that other groups are growing faster.
• Babies: clothing and footwear, toys, games, personal care.
• Children: clothing and footwear, toys, games, confectionery, soft drinks.
• Pre-Teenagers (Allowances): fashion, recreation, technology (smartphones, apps, video games/consoles), restaurants (fast
food/quick serve, fast casual), confectionery, sporting goods.
• Teenagers (Minimum Wage): restaurants (fast food/quick serve, fast casual), alcohol, tobacco (vaporisers), personal care
(makeup), technology (smartphones, apps, video games/consoles), fashion, recreation, sporting goods.
POPULATION: CHILDREN AND TEENAGERS (EGYPT 2015-2050)

Median Age Of Population
Between 2020 and 2050, Egypt's median age will remain within the young adult range, boding well for retailers as consumption
trends remain more or less consistent. This is also indicative of the country's large and growing youthful population. We forecast
that the Egyptian median age will increase to 30.3 years over the long term to 2050, from 23.8 years in 2020. Egypt will have one of
the youngest consumer bases among its Middle East and North Africa peers, with the regional average expected to be 34.1 years in
2050.
Median Age
Egypt, Iran, Lebanon & Oman, years (2015-2050)
e/f = BMI estimate/forecast. Source: UN, BMI
• This indicator works as a complement to our other population age forecasts, providing an average age of the population and
how it is changing over time.
• Developed markets typically have a higher score for this indicator; they are ageing as people live longer and birth rates fall. Older
generations can present an opportunity, if they are marketed to in the right way. Convenience, easy-to-open packaging and
traditional ingredients are appealing to this group.
• Emerging markets tend to be lower in average age, as birth rates remain strong and populations grow. This bodes well for
companies targeting trendsetting, younger generations entering the consumer market with higher levels of income than their
parents. One area of risk is that youth unemployment can be quite high in these markets, capping the spending.
MEDIAN AGE OF POPULATION (EGYPT 2015-2050)

Geography Indicator 2015 2020 2025f 2030f 2035f 2040f 2045f 2050f
Egypt Median age of population 23.1 23.8 24.5 25.4 26.3 27.5 29.0 30.3
Urban And Rural Split
Urbanisation will gain momentum in Egypt over 2020-2050, increasing from 42.8% to 55.6%. By 2050, we forecast 89.2mn people
to live in urban areas, almost double the 46.0mn in 2020. Egypt's total urban population is boosted by its large population size,
offering the largest urban consumer base, in absolute terms, among its regional peers. However, the current percentage of
urbanisation (just above 45% of the total population) is relatively low by regional standards. The vast majority of the Egyptian
population is concentrated along the Nile river, as well as in the Nile basin. The three major cities in Egypt are the capital Cairo,
Alexandria and Giza.
Urban And Rural Population Trends

Urban & Rural Population, '000 (2000-2050)
• Markets with higher urbanisation levels are generally more attractive, due to developed logistics, concentrated consumers and
higher spending levels, among other reasons.
• In contrast, consumers in rural regions are harder to reach and typically have lower spending power, making investment riskier,
particularly in emerging markets.
RURAL/URBAN POPULATION (EGYPT 2015-2050)

Urban pop., % of total 42.8 42.8 43.4 44.8 46.8 49.4 52.5 55.6
Rural pop., % of total 57.2 57.2 56.6 55.2 53.2 50.6 47.5 44.4
Urban pop., total, '000 41,811.1 45,976.8 50,514.7 56,034.2 62,756.4 70,872.3 79,947.1 89,161.8
Rural pop., total, '000 55,912.7 61,488.3 65,760.8 69,117.5 71,427.4 72,550.4 72,309.9 71,178.1
Population per sq km, persons 98.2 108.0 116.8 125.7 134.8 144.1 153.0 161.1
Male And Female Split
Egypt will have a fairly even split in its male and female population, maintaining a ratio of 1.0 throughout our long-term forecast
period. The male population will increase to 80.5mn by 2050, up from 54.4mn in 2020, with the female population reaching a total
of 79.8mn from a base of 53.1mn over the same period. Despite its large population size and substantial female population, Egypt is
clouded by a very low female participation rate in the labour market. The World Bank recorded the country's female labour force
participation rate at 18.5% in 2021, well below the global average of 46.0%, and also below regional peers Lebanon and Oman.
POPULATION RATIO (EGYPT 2015-2050)

Population, total, male, '000 49,472.6 54,357.4 58,764.9 63,178.2 67,649.0 72,208.2 76,546.4 80,495.4
Population, total, female, '000 48,251.2 53,107.7 57,510.6 61,973.5 66,534.7 71,214.5 75,710.5 79,844.5
• Except for some extreme examples such as Mainland China, the male/female split tends to be about equal, with only a slight
leaning towards one gender.
• The rise of the female consumer is becoming an important part of company strategy. They are beginning to tailor products,
advertising and marketing - which were previously male-focused or neutral - to women.
Market Overview
Retail Trends
The Egyptian retail sector benefits from the continuing popularity of brick-and-mortar stores despite a recent rise in e-commerce.
With many Egyptians on low incomes, consumption is still focused on essential products, and informal retail is still prevalent.
Informal retail formats remain prevalent in Egypt, particularly in non-urban areas. However, the retail landscape is becoming
increasingly formalised. International retailers continue to enter and expand in the country, particularly through franchise
agreements with regional firms. Egypt's large, growing and youthful population is driving modernisation, resulting in growing
demand for foreign brands across a number of sectors. We maintain the view that e-commerce is an area of strong growth, as more
consumers gain internet access and final-mile logistics improve.
Latest Updates
• In March 2023, GMG announced plans to open 100 stores across Egypt, as well as its new headquarters in district 5 Cairo.
• In March 2023, Starbucks Egypt unveiled a store in Giza inside the Grand Egyptian Museum.
• In February 2023, the Albania-based Mulliri Vjeter coffee chain, which operates 25 stores across Albania, Kosovo and North
Macedonia, has indicated its expansion into Cairo could be a step towards further international expansion.
• In December 2022, Talaat Moustafa Group and Azadea Group celebrated the opening of 11 new brands at Open Air
Mall. Azadea Group's brands, which opened during the ceremony, are ZARA, Oysho, Pull&Bear, Bershka, Stradivarius,
Massimo Dutti and Zara Home, with Leftie soon to follow in the near future.
• In December 2022, it was announced that Beko Egypt, a subsidiary of Turkiye-based Arcelik, had laid foundation stone for a
new USD100mn home appliance plant in Egypt.
• In November 2022, Egypt’s Investment Authority and the Mainland China-based Haier, a home appliances company, signed a
memorandum of understanding (MoU) to establish an industrial complex for the manufacturing of household appliances.
• MaxAB raised USD40mn in pre-series B funding in October 2022.
• In October 2022, Talaat Moustafa Group signed an agreement with Baraka Group to launch seven new locations at All Seasons
Park in Madinaty, including New Balance and Beverly Hills Polo Club.
Clothing And Footwear
Egypt's clothing and footwear market is heavily fragmented, with unbranded items popular with lower-income groups. Most
unbranded fashion products are sold through small, independent apparel stores and street markets. This segment of Egypt's
clothing and footwear sector has witnessed increased consumer demand following high inflation rates as a result of Egypt's move
to a free-floating currency in November 2016 and the implementation of a new value-added tax system, which put downward
pressure on consumers' spending power. This has created a more competitive environment for international players, with many
consumers opting for either unbranded products or more affordable local fashion brands. We predict, however, that as in middle-
class increases over the medium term (2023-2027), more consumers will opt for branded apparel and footwear, creating
opportunities for fashion retailers.
Many international fashion brands have a presence in Egypt, with most of them operating through franchises. Lebanon's Azadea
Group operates popular fashion brands including Bershka, Zara, Pull&Bear, Massimo Dutti and Sunglass Hut. Kuwait's Alshaya
Retail is the operator of H&M in Egypt, which currently has 13 stores in the country, as well as Mothercare (nine outlets),
Victoria's Secret (two outlets) and Evans (five outlets). Retail Group Egypt, a subsidiary of Saudi-based Fawaz Al Hokair
Fashion Retail, owns the franchise rights of Mango (six outlets) and GAP (three outlets). Turkish fashion retailer LC Waikiki has 25
outlets in Egypt and is rapidly gaining popularity due to its relatively competitive price points. Many international fashion brands
have opened stores in Egypt's key shopping malls, including Citystars, Cairo Festival City Mall and Mall of Egypt. Al-Futtaim, a UAE-
based conglomerate, is a significant player in Egypt's fashion market, owning various brands including Ted Baker and Guess. Al-
Futtaim announced in August 2020 that it had partnered with fintech startup ValU to provide a six-month interest-free installment
plan for shoppers in Egypt, tapping into the expanding price-sensitive consumer base on the back of the Covid-19 pandemic.
Arafa Holding is a large domestic retailer in Egypt's clothing and footwear sector, operating 35 Concrete outlets focusing on
higher-end menswear. The company's operations are vertically integrated across three areas of activity: textile manufacturing,
apparel and tailoring, and retail and distribution. Arafa also owns Brandshub.co, which offers value fashion products for men,
women and children. Brandshub.co has 10 physical retail stores across the country as well as an online platform. Local fashion
retailer Rojada concentrates on womenswear and has 11 stores across Cairo and Alexandria.
Egypt's large, growing and youthful population is a key factor in the growing demand for foreign brands in the retail market. In 2022,
there was been a series of acquisitions and expansions into Egypt in the clothing and footwear segment, specifically within ath-
leisure. In July 2022, Magma, an Egyptian sportswear manufacturers, announced that it was acquired by Averroes Ventures, with
investments from its Chairperson Mohamed El-Sewedy to meet the needs of an untapped segment of the Egyptian market.
IIn October 2022, Talaat Moustafa Group signed an agreement with Baraka Group to launch seven new locations at All Seasons Park
in Madinaty, including New Balance and Beverly Hills Polo Club. We expect to see a continuation of this in 2023, as the retail
segment in Egypt becomes more formalised and consumers frequent malls more often. In December 2022, Talaat Moustafa
Group and Azadea Group celebrated the opening of 11 new brands at Open Air Mall. Azadea Group's brands, which opened during
the ceremony, are ZARA, Oysho, Pull&Bear, Bershka, Stradivarius, Massimo Dutti and Zara Home, with Leftie soon to follow in the
near future.
Egypt's online clothing and footwear market is set to become increasingly competitive, with Jumia.com, Souq.com,
Bespokeegypt.com and Brandshub.co all having extensive online fashion offerings. In February 2022, Jumia.com signed an MoU
with Medium, Small and Micro Enterprise Development Agency in effort to create new opportunities for Egypt’s local SMEs sector by
availing their products on the platform. We also note that international fashion brands, including H&M, have online webstores in
Egypt. Egyptian online fashion startup Dresscode received over USD100,000 in seed funding from Egypt Ventures in August 2020,
showing the potential of clothing and footwear e-commerce in Egypt. DressCode’s 2022 growth plan began with an investment in
manufacturers’ backend technology. In September 2021, Amazon announced the launch of Egyptian singer Amr Diab’s ‘34’
fashion brand, which is available exclusively on Amazon.eg for customers in Egypt.
SELECT CLOTHING AND FOOTWEAR RETAILERS

Company Parent/Ownership Sub-Sector Stores
Bershka Azadea Group Clothing, footwear, accessories Seven
Brandshub.co Arafa Holding Clothing, footwear, accessories 12
Concrete Arafa Holding Clothing, footwear, accessories 37
Evans Alshaya Retail Clothing, footwear, accessories One
GAP Fawaz Al Hokair Fashion Retail Clothing, footwear, accessories Three
H&M Alshaya Retail Clothing, footwear, accessories 13
LC Waikiki LC Waikiki Clothing, footwear, accessories 28
Mango Fawaz Al Hokair Fashion Retail Clothing, footwear, accessories Seven
Massimo Dutti Azadea Group Clothing, footwear, accessories Seven
Mothercare Alshaya Retail Clothing, footwear, accessories Three
Oysho Azadea Group Clothing, footwear, accessories Four
Pull&Bear Azadea Group Clothing, footwear, accessories Four
Rojada Rojada Clothing, footwear, accessories Seven
Stradivarius Azadea Group Clothing, footwear, accessories Six
Victoria's Secret Alshaya Retail Clothing, footwear, accessories Two
Zara Azadea Group Clothing, footwear, accessories 18
Source: Company information, BMI
Household Goods, Homeware And Home Improvement
Egypt's expanding middle class will drive growth in the household goods sector across the forecast period, particularly within the
household appliances sub-sector. There is considerable long-term potential within the sector, which remains relatively unsaturated
and is attracting foreign investment. Major international retailers with a presence in Egypt's household goods sector
include Sweden-based IKEA, UAE-based Home Centre and Spain-based Zara Home (part of Inditex Group). However, it is the
domestic retailer Dary, owned by Egypt-based CMB Group, which leads the sector. IKEA is expanding in Egypt, having opened its
second store in the country in the Mall of Arabia in March 2021.
CMB Group opened its first Dary Building & Decoration Centre in Egypt in 1997, and the group currently employs more than 2,000
staff. Whereas much of Egypt's household goods sector is based in and around Cairo, Dary has outlets throughout major towns and
cities in the country. Dary Building & Decoration Centres use the UK-based Homebase stores as their model. After delaying its
expansion plans as a result of the Arab Spring, the company has been increasing its footprint steadily since 2013.
In 2015, US-based DIY major retailer Ace Hardware entered the country through a franchise agreement with the Egypt-based
Masader for International Trading. There are currently two Ace Hardware stores in Egypt.
E-commerce is becoming increasingly important in the household goods space, with this trend having been accelerated by the
Covid-19 pandemic and subsequent stay-at-home orders. In August 2022, Homzmart, an household goods and homeware e-
commerce platform, raised USD23mn in a series B funding round. The platform features 150,000 products from thousands of
brands and merchants and its sales grew by 2,900% in 2020. In March 2022, Homzmart acquired Berlin-based home interior design
firm MockUp Studio, which uses artificial intelligence to make designs, as well as expanding their platform to Saudi Arabia.
SELECT HOUSEHOLD GOODS RETAILERS

Company Parent/Ownership Sub-Sector Stores Notes
Zara Home Index Group Homeware Five na
Dary Building and CMB Group Home improvement, hardware 29 Online presence
Decoration Center
Home Centre Landmark Group Homeware Two na
IKEA IKEA Group Furniture, Homeware Two na
Source: Company information, BMI
Electronics
Hypermarkets and department stores in Egypt offer streamlined ranges of consumer electronics brown and white goods. However,
the country's largest specialist consumer electronics retail chain is B.Tech, a home-grown retailer with a nationwide presence.
B.Tech is an Egyptian joint stock company established in 1997. During that period it became the largest chain specialised in the
trading and distribution of electrical appliances and household within Egypt. The company has a network of 89 branches across 29
towns and employs approximately 4,200 people in Egypt. In May 2018, B.Tech concluded an EGP300mn strategic partnership with
DPI, a British private equity firm. The agreement will see DPI invest EGP300mn in B.Tech to fund its growth strategy in a transaction
that is considered DPI’s first venture in the Egyptian market.
Egypt's consumer electronics sector is expected to show strong growth across the forecast period, with retailers attracted by an
underpenetrated market and the growing demand for computers, smartphones and tablets from a youthful consumer base. As
such, the country's electronics retail market continues to attract significant investment. In January 2022, Saudi retailer United
Electronics announced that it is looking to grow its market share in Egypt to 10% over the next five years.
Other Egyptian consumer electronics retailers include Appliance Egypt (which was founded in 1998 and specialises in computing
and telecommunications equipment sales) and Cairo Sales Stores (a retailer of consumer electronics brown and white goods).
Both of these retailers now provide online shopping services. US-based RadioShack is another major player in Egypt, with
operations across the country, franchised by the local Delta RS Group. Sharaf DG, a UAE-based electronics retailer, is also present
in Egypt.
The first RadioShack opened in Egypt in 1998 in Nasr City. Since then, the store's footprint has increased to around 80 outlets run
under a franchise agreement with Egypt-based Delta RS Group. The chain has a truly national reach, with stores in major towns and
cities including Assiut, Sharm el Sheikh, Hurghada and Mansoura.
Silicon Industries Corporation (SICO), the maker of Egypt's first locally manufactured smartphone, is gaining popularity in Egypt.
The company manufactures an average of 2mn devices (mostly smartphones and tablets) annually. In 2019, the company claimed
that it had a 2.7% market share of the Egyptian smartphone market, with aims to increase this to 17% in 2020. SICO sells its
products at more competitive prices than popular international brands such as Samsung and Apple, appealing to a large number
of lower income consumers in Egypt. We note that Samsung announced in June 2020 that it intends to invest USD84mn in Egypt
over the next five years, with most of the investment going to computer screen and TV production.
Many consumer electronic brands are recognising the benefits of manufacturing units for household appliances in Egypt. In
November 2022, Egypt’s Investment Authority and the Mainland China-based Haier, a home appliances company, signed an MoU to
establish an industrial complex for the manufacturing of household appliances and its other related industries. The first phase of the
project will include the production of air conditioners, washing machines, screens and complementary industries, while the second
phase will include the manufacture of refrigerators and freezers. In December 2022, it was announced Beko Egypt, a subsidiary of
Turkey-based Arcelik, had laid foundation stone for a new USD100mn home appliance plant in Egypt. The factory will develop local
supplier ecosystems, while supporting the government’s long-term strategy to drive industrial localisation and establish Egypt as a
significant production and export hub to overseas markets. Scheduled to begin operations by Q423, the plant is projected to have
an annual capacity to manufacture around 1.5mn household appliances, with more than 60% planned for export to Europe, the
Middle East and Africa. The first phase of the investment will focus on producing eco-friendly cookers and refrigerators.
The UAE’s Nikai Electronics commenced operations in Egypt in February 2020 by setting up a production facility for televisions.
Nikai has partnered with Raya Trade for the distribution of its products across Egypt. Nikai’s products are available through Raya’s
20 retail stores and its online shop.
In March 2020, the E-Tadweer app was launched. The app was launched in collaboration with the Ministry of Communications and
Information Technology and will stimulate Egyptian consumers to safely dispose of their electronic devices.
SELECT ELECTRONICS RETAILERS

Company Parent/Ownership Sub-Sector Revenues Employees Stores Notes
Appliance Appliance Egypt Electronics na 500-1,000 Nine na
B.Tech B.Tech Electronics EGP4.3bn 4,200 89 Present across 29 cities in Egypt.
Radio Shack Delta RS Electronics na 2,000 65 Franchised by Delta RS Corp.
Elaraby Elaraby Group Electronics na na 12 na
na = not applicable. Source: Company information, Fitch Solutions
Department Stores
Most of the department stores are concentrated in the largest metropolitan areas, most notably Cairo and Alexandria. Traditional
Egyptian department stores have declined over the years. Omar Effendi is the oldest department store in the country, with a
history dating back to the 1850s. After a long period of being owned by the state, in 2006, a controlling stake in the store chain was
sold to the Saudi Anwal Group. However, in 2011, the Egyptian State Council's Administrative Court decided to annul the sale of
the company. This decision triggered long-lasting legal proceedings. Currently, the store chain remains in the hands of the state and
operates 82 outlets in Egypt.
While Omar Effendi remains the largest department store chain in Egypt, over recent years, famous international brands have been
expanding in the country, occupying retail space in the country's largest malls. Debenhams, an upmarket department store chain,
is present in Egypt through a franchise agreement with Kuwait's Alshaya Retail, which operates three shops in the country. We note
that in July 2021, online fashion retailer Boohoo struck a deal with Alshaya Group to sell its brands in franchised Debenhams stores
as well as online in the Middle East, including Egypt.
Originally conceived as a joint venture, Carrefour's partnership with MAF was aimed at expanding its presence across the high-
growth Middle East and North Africa region. MAF is now the sole owner of the Carrefour franchise in the Middle Eastern region,
having bought the France-based company's 25% stake for EUR530mn. Carrefour continues to invest in Egypt, with Talaat Moustafa
Group and Majid Al Futtaim Retail announcing the opening of Carrefour’s second store in Madinaty at All Seasons Park in
October 2022.
Marks & Spencer, a UK-based brand franchised by the UAE's Al-Futtaim Group, now has four locations in Cairo and Alexandria.
SELECT DEPARTMENT STORE CHAINS

Company Parent/Ownership Sub-Sector Stores Notes
Marks & Spencer The Al-Futtaim Department Four Mid-market

Group store
Debenhams Alshaya Retail Department Three Upmarket

store
Carrefour The Majid Al- Department and 46 na

Futtaim Group retail store
Omar Effendi Government owned Department 82 na

store
na = not applicable. Source: Company information, BMI
E-Commerce And Online Marketplaces
E-commerce still accounts for a small fraction of Egypt's total retail sales. Low bank account and credit card ownership rates, poor
computer literacy, insufficient internet penetration rates, and logistics obstacles regarding the last mile were among the key factors
inhibiting e-commerce growth in the country during the past five years. However, this does underscore the potential for growth in
the future. We maintain the view that e-commerce is an area of strong growth as more consumers gain internet access and final-
mile logistics improve. However, we do not believe this sector is strong enough to disrupt the physical retail space just yet.
The situation is improving, with e-commerce having received a significant boost from the Covid-19 pandemic and subsequent
social distancing measures. The increase in e-commerce comes from rising internet penetration rates, driven by the younger
generation who are more familiar with technology. A number of domestic and international firms, such as Jumia and Amazon, are
active in Egypt's market, operating large online stores and selling clothing, electronics and household items. In February 2022, Jumia
signed an MoU with Medium, Small and Micro Enterprise Development Agency in an effort to create new opportunities for Egypt’s
local SMEs sector by availing their products on the platform. Grocery delivery services are in demand from consumers in Egypt, with
many of them receiving new rounds of funding in 2022. One such platform is MaxAB, which raised USD40mn in pre-series B funding
in October 2022, to follow its acquisition of the Morocco-based and Y Combinator-backed WaystoCap in 2021. Other market
players such as Cartona and Capiter also raised significant capital in 2022.
In September 2021, the country's leading e-commerce platform Souq.com, was re-branded to Amazon.eg, after Amazon acquired
Souq.com in 2017. Amazon announced that it will serve the Egyptian market through more than 15 delivery stations across the
country and investments of USD63.5mn (EGP1.0bn). Part of the investment plan included the opening of a new warehouse, which
covers 28,000sq m, in 10th of Ramadan City in August 2021.
Jumia is one of the most popular online marketplace in Africa, including Egypt, owned by Africa Internet Group, which is backed
by the German venture Rocket Internet. Jumia offers a wide selection of items, including clothing and footwear, electronics,
household goods and accessories. Egypt is Jumia’s second largest market after Nigeria. To boost growth and counter low bank
account penetration rates and the lack of trust in electronic payment systems, Jumia has been offering innovative payment
methods, such as payment upon delivery by cash or credit card. In June 2021, Jumia announced that Egypt was once of the market
it was targeting most heavily in terms of investments. The company seeks to increase the total number of pickup stations to 200 in
July 2021 and increase the number of last mile delivery stations by 40%. In June 2022, Other plans include increasing warehouse
and delivery capacity to improve next-day delivery services. However, 2022 proved to be a difficult year financially and across many
markets for Jumia despite efforts at cutting costs and reducing losses. In its latest financial statement, Jumia’s loss widened by 4.8%
to USD237.8mn in 2022 from USD226.9mn in 2021. Jumia said cost reduction is a key priority in the company’s strategy going into
2023.
In a bid to regulate the industry, the Egyptian Tax Authority has become a lot stricter, enforcing the charging of VAT for all e-
commerce transactions of goods that would be subject to VAT if sold offline. While some platforms have already responded and
incorporated the 14% duty into their billing systems, only 2% of Egypt’s e-commerce market is regulated, with the rest being
unregistered and untaxed. On June 3 2021, a new law by that imposes a 14% VAT on all online delivery services provided by
restaurants and shops came into effect. All restaurants and businesses with more than EGP500,000 in annual revenues will have to
charge and remit VAT on online delivery services.
We highlight that Covid-19 was a catalyst for e-commerce in Egypt. Jumia reported that traffic to its Egyptian website increased
during the initial stages of the Covid-19 outbreak. Amazon’s Souq.com stated that it saw an unprecedented increase in new
customers in Egypt during the first weeks of the pandemic, while it also saw a hike in orders from existing customers, although it did
not publish actual data. Souq.com reported that the top selling categories were in the grocery segment, most notably food
products. We highlight that growth in demand for grocery products through e-commerce channels was especially strong, with
Carrefour having reported a 747% y-o-y in online orders in Egypt in H120.
SELECT ONLINE RETAILERS

Company Parent/Ownership Sub-Sector Notes
Jumia Africa Internet Group Online, clothing, homeware, A branch of international online
electronics, beauty stores.
Souq.com Amazon.com Online, clothing, homeware, Owned by Amazon.

electronics, beauty
Noon.com Emaar Online, clothing, homeware, na

electronics, beauty
Pharmacies And Drugstores
Egypt's drugstore and pharmacies retail sector is heavily regulated. According to Egyptian law, pharmacies can be run only by
licensed professionals, with a maximum of two outlets per licence. Officially, corporate entities are not allowed to operate
pharmacies, but several companies such as El-Ezaby Pharmacy, SEIF Pharmacy and Al'Image Pharmacy (formerly known as
Ali & Ali Pharmacy) operate larger networks of outlets across the country by finding innovative ways to get around these
restrictions. The Egyptian government is regulating pharmaceuticals prices, with the aim of ensuring that products are affordable for
low-earning citizens. However, the increasing wholesale cost of pharmaceutical products, combined with the decline of the
Egyptian currency, has led to recurring medicine shortages across the country. As a result, counterfeit drugs have become a major
concern and online purchases of drugs such as the contraceptive pill are experiencing significant growth.
Launched in 2008, Agzakhana.com is unique to Egyptian pharmacies in that it has an online-only presence and operates through
other pharmacies to access medicines it lacks. Vodafone Ventures currently holds a 30% stake in Agzakhana, which reportedly
has an annual sales turnover of around EGP1bn. The pharmacy aims to acquire a 1% stake in Egypt's EGP80bn domestic
pharmaceutical market, having seen its growth rates since 2014 increase by around 20% per month.
We believe that over the medium to longer-term, online pharmacies will be an area of significant growth in Egypt. In July 2021, Cairo-
based digital pharmacy market place Yodawy raised USD7.5mn in a Series B round led by Middle East Venture Partners,
indicating investor confidence in this segment.
Fouda Pharmacy is a small chain of community pharmacies and brands itself as Egypt's first electronic interactive pharmacy.
Fouda's online service allows customers to send a photo of their doctor's prescription for the pharmacy to service the prescription
and deliver it to the customer the same day. Through its adoption of web-based technology, the company has plans to expand its
service beyond Egypt.
During the Covid-19 pandemic, multiple pharmacies reported an increase in sales due to stockpiling and panic buying by
consumers. As a result, there were reports that some over-the-counter and prescription drugs became hard to find. In April 2020,
the Egyptian government set a price cap on products necessary for slowing the spread of Covid-19, such as face masks, gloves and
hand sanitisers. The regulations required pharmacies to advertise the prices and make them visible to customers.
In a market strained by two relatively recent currency floats, subsidy reduction, increasing customs in 2016 (60% custom duty on
cosmetics) consumers have had to cut back drastically on their use of luxury cosmetic products, especially since most are either
imported or largely dependent on imported raw materials. Financial stress, coupled with a young population concerned about the
way they look have left many looking for cheaper alternatives to imported cosmetic products. This creates opportunities for
Egyptian companies like Eva, Luna and Amanda to increasingly penetrate the market. Taking advantage of local brand, as well as
international ones, myli, owned and operated by Majid Al Futtaim in Egypt, opened the doors to its fifth branch in Egypt at Arkan
Plaza in August 2022 with hopes to open another by the end of 2022. The beauty concept store offers a diverse range of products
to the Egyptian public including cosmetics, fragrances, hair and skincare and beauty accessories at competitive prices.
SELECTED PHARMACY CHAINS

Company Parent/Ownership Sub-Sector Employees Stores Notes
El Ezaby El Ezaby Pharmacies Pharmaceuticals 1,000-5,000 86 na

Pharmacies
Misr Pharmacies Misr Pharmacies Pharmaceuticals, health and 350 11 na

beauty
SEIF Pharmacies SEIF Group Pharmaceuticals, health and na 23 na

beauty
Agzakhana Ahmed & Sherif Pharmaceuticals, health and na na Online presence

Shabana beauty only.
Eva na Pharmaceuticals, health and 500-1,000 na na

beauty
LUNA Perfumes Luna Group Pharmaceuticals, health and 500-1,000 One na

and Cosmetics beauty
Amanda na Health and beauty 50-200 One na
Shopping Centres And Malls
Malls are becoming increasingly prevalent in Egypt, especially in the largest cities such as Cairo, Alexandra and Giza (which is part of
greater Cairo). Because of the population density in Cairo, space is at a premium, and finding suitable land is a significant challenge.
As a result, shopping malls are clustered in the western and eastern suburbs, in particular at the outskirts where new suburbs are
expanding. The Shopping Centres Act, which was passed by the government in 2018, eased legislation for the establishment of
malls. The law requires that all new real estate projects include a commercial area, which makes it more appealing for retail
developers to begin new projects. However, there is a lack of supply in urban areas at the moment, as new developments are not
completed quickly enough to satisfy demand.
Almaza City Centre is one of Cairo's newest malls, based in Heliopolis and opened in September 2019. The Almaza City Centre mall
has 103,000sq m of gross leasable area (GLA), with more than 270 stores. The Madinaty Mall is still being developed but will have
more than 180,000sq m of retail and entertainment space. The mall is segmented into six different zones, with Zone A being
dedicated to a combination of value brands, bridge brands and premium brands to cater to the target market.
Dubai-based MAF has invested heavily in Egypt, having developed the City Centre malls in both Alexandria and Maadi. Strong
investment will continue over the medium term, with MAF stating that it will invest EGP16bn in Egypt over the next two to three
years, of which EGP14bn will be for the development of a new mall. MAF's latest project, the Mall of Egypt, opened in March 2017
and became the country's largest mall with 165,000sq m of retail space. This mall was a huge development: the mall itself cost
EGP4.9bn and the associated local infrastructure (including 6,500 parking spaces) cost a further EGP250mn. High-end fashion
outlets are well represented and entertainment services are provided by a large multi-screen cinema, indoor dry ski slope and family
entertainment area. MAF announced in August 2020 that it would launch a click-and-collect service across its shopping malls (Mall
of Egypt, City Centre Almaza, City Centre Maadi and City Centre Alexandria). Cairo Festival City Mall is another popular shopping mall
based in New Cairo City. The mall opened in 2013 and is home to more than 300 shops, including IKEA.
We note that there is continued investment in Egypt's mall sector. UAE-based Al-Futtaim has announced a EGP200mn
(USD12.7mn) renovation plan for its Cairo Festival City Mall as part of a major expansion that was completed in early 2023. It caters
towards the luxury consumption in Egypt and has forged a partnership with Vogue Italia. It introduced a series of 80 first-to-the-
market luxury men's and women's fashion brands together with jewelry and watch brands. In addition, Afaaq Construction and
Real Estate Investment announced the launch of the 2,300sq m Amorada Mall, located in New Cairo, which is planned to be
completed in 2022. In September 2021, Talaat Moustafa Group, a leading real estate developer in Egypt, announced a strategic
partnership with retailer Azadea Group to bring 13 new brands to the Open Air Mall at Madinaty. In December 2021, Marakez, one
of the largest developers in Egypt, said work is moving at a steady pace on its Mall of Mansoura project in the Dakahlia governorate,
which is due for completion in 2023. Meanwhile, a new mall is expected to be in operation by 2024. In April 2022, Mazaya
Developments began enabling works on the EGP1bn (USD54.1mn) Rook Mall in the New Administrative Capital, Egypt. The
13-storey commercial project, designed by local firm Archrete, will cover more than 2,632sq m and it will include offices and shops.
Cairo's second largest largest shopping centre, the Mall of Arabia, is owned by Saudi Arabia-based Fawaz Al Hokair Group. Located in
the capital's 6th of October City area, it currently has a GLA of around 160,000sq m. The vast array of retail outlets includes both
local brands and international brands such as Adidas, Cerruti, Mango, Reebok, Samsung, Timberland, Tommy Hilfiger, Zara
and Zara Home. The mall owners see further positive opportunities for growth and are reportedly looking to invest a further
EGP13bn in developing more than 500,000sq m of GLA within the Egyptian market over the coming years.
In June 2022, FAS Real Estate, affiliated to Fawaz Al Hokair Group, aims to launch new real estate projects in Egypt’s Cairo and
North Coast. The company seeks to utilise the existing opportunities in the Egyptian market, as it is planning to establish two new
residential and commercial projects. Al Hokair noted that the Group’s investment in Egypt exceeded SAR1.8bn (USD480mn),
focusing on real estate, malls, and clothing. The group is ready to commit to more investments during the coming period.
Consumer & Retail Glossary

BMI's household spending data is based on the UN Classification of individual consumption by purpose (COICOP), which is a
classification system used to define consumption expenditures incurred by households. This lists various categories and sub-
categories defining the different categories of items on which households spend, and is the preferred model used in household
expenditure surveys carried out by official statistics agencies from which our household spending data is sourced.
Where spending data is not readily allocated into the COICOP format, we apply a rigorous and logical approach in allocating data to
align with these categories, and if needed, apply aggregation methods or other techniques to achieve category level data.
Our spending data defines spending in terms of three different types of consumer units: individuals (given as per capita),
households and total economy.
• Household - defined as a group of people living in the same residential unit. The number of households and average persons
per household is sourced from official statistics. Where this data is unavailable, we use alternative best sources for the data, and
where needed use best practice techniques to make an estimate. Households exclude institutionalised individuals, such as those
in hospitals and military, religious and other institutions. Where official statistics include it, we use the relevant best practice to
amend the data in order to keep all markets similar with respects to their definition.
• Per household spending - defined as spending by each household unit.
• Per capita spending - defined as spending by each individual person.
Below are definitions to the different indicators covered in our Consumer & Retail publications. For more details on what is included
in each of the categories, please review: 'UN - detailed structure and explanatory notes', http://unstats.un.org/unsd/cr/registry/
regcst.asp?Cl=5&Lg=1
Food and non-alcoholic drinks spending - refers to the sum of food spending and non-alcoholic food spending. Details of what
is included in these categories are given below.
Food spending - refers to the sum of spending on the following food items:
01.1.1 - Bread and cereals
01.1.2 - Meat
01.1.3 - Fish and seafood
01.1.4 - Milk, cheese and eggs
01.1.5 - Oils and fats
01.1.6 - Fruit
01.1.7 - Vegetables
01.1.8 - Sugar, jam, honey, chocolate and confectionery
01.1.9 - Food products, other.
Note that this refers to spending on food for home consumption and excludes food spending for consumption outside the home.
Non-alcoholic drinks spending - refers to the sum of spending on the following types of drinks:
01.2.1 - Coffee, tea and cocoa
01.2.2 - Mineral waters, soft drinks, fruit and vegetable juices
Note that this refers to spending on drinks for home consumption, and excludes spending for consumption outside the home.
Alcoholic drinks and tobacco spending - refers to the sum of spending on the following items/services:
Alcoholic drinks spending - refers to the sum of spending on the following items:
02.1.1 - Spirits
02.1.2 - Wine
02.1.3 - Beer
Tobacco spending - refers to spending on the following tobacco products: cigarettes; cigarette tobacco and cigarette papers;
cigars, pipe tobacco, chewing tobacco or snuff. Excludes other smokers' articles.
Clothing and footwear spending - refers to the sum of spending on the following items/services:
Clothing spending - refers to the sum of spending on the following clothing items:
03.1.1 - Clothing materials
03.1.2 - Garments
03.1.3 - Other articles of clothing and clothing accessories
03.1.4 - Cleaning, repair and hire of clothing
Footwear, including repair, spending - refers to the sum of spending on the following items:
03.2.1 - Shoes and other footwear
03.2.2 - Repair and hire of footwear
Housing and utilities spending - refers to the sum of spending on the following items:
04.1 - Actual rentals for housing
04.2 - Imputed rentals for housing
04.3 - Maintenance and repair of the dwelling
04.4 - Water supply and miscellaneous services relating to the dwelling

04.5 - Electricity, gas and other fuels
Furnishing and home spending - refers to the sum of spending on the following items/services:
Furniture and furnishings spending - refers to spending on the following items:
05.1.1 - Furniture and furnishings
05.1.2 - Carpets and other floor coverings
05.1.3 - Repair of furniture, furnishings and floor coverings
Household textiles - refers to the sum of spending on the following items:
05.2.0 - Household textiles which includes items such as fabrics, bedding, linen, kitchen and bathroom linen, cloths and towels.
Household appliances - refers to the sum of spending on the following items:
05.3.1 - Major household appliances, whether electric or not
05.3.2 - Small electric household appliances
05.3.3 - Repair of household appliances
Glass, tableware and utensils - refers to the sum of spending on the following items:
05.4.0 - Glassware, tableware and household utensils which includes items such as cutlery, flatware, silverware, kitchen utensils,
pans, non-electric household containers, waste bins etc.
Home and garden tools/equipment spending - refers to the sum of spending on the following items:
05.5.1 - Major tools and equipment
05.5.2 - Small tools and miscellaneous accessories
Goods and services for routine household maintenance - refers to the sum of spending on the following items:
05.6.1 - Non-durable household goods
05.6.2 - Domestic services and household services
Health spending - refers to the sum of spending on the following items/services:
06.1 - Medical products, appliances and equipment
06.2 - Outpatient services
06.3 - Hospital services
Transport spending - refers to the sum of spending on the following items/services:

07.1 - Purchase of vehicles
07.2 - Operation of personal transport equipment
07.3 - Transport services
Communications spending - refers to the sum of spending on the following items/services:
08.1 - Postal services
08.2 - Telephone and telefax equipment
08.3 - Telephone and telefax services
Recreation and culture spending - refers to the sum of spending on the following items/services:
09.1 - AV, camera and computer - refers to the sum of spending on the following items: AV equipment spending, including
television, radio and CD players; cameras and video cameras, including sound recording equipment; computers spending, including
all types of personal computers, software and peripherals; recorded media, including recordable CDs, cassette and recording films;
AV, camera and computer repairs
09. 2 - Other major durables for recreation and culture
09.3 - Toys, sports, gardens and pets - refers to the sum of spending on the following items: games, toys and hobbies spending,
including items such as card, board, electronic games and hobbies, eg stamp collecting and video games; sport and camping
equipment, including items such as sports equipment, and game specific footwear; gardens, plants and flowers, including artificial
flowers, pots and pot holders; pet food/products and vet fees, including all pet related accessories.
09.4 - Recreational and cultural services
09.5 - Newspapers, books and stationery
Education spending - refers to the sum of spending on the following items/services:
10.1 - Pre-primary and primary education
10.2 - Secondary education
10.3 - Post-secondary non-tertiary education
10.4 - Tertiary education
10.5 - Education not definable by level
For more details on what is included in each of the above categories, please review 'UN - detailed structure and explanatory notes'.
Restaurants and hotels spending - refers to the sum of spending on the following items/services:
11.1 - Catering services
11.2 - Accommodation services
Insurance and Financial Services spending – refers to the sum of spending on the following items/services:
12.1 – Insurance
12.2 – Financial Services
Personal, Social Protection and Miscellaneous Goods & Services spending - refers to the sum of spending on the
following items
Personal care and effects spending - refers to the sum of spending on the following items:
13.1 - Personal care products spending - includes spending on hairdressing/personal grooming, small electric appliances for
personal care, toiletries and other similar products.
13.2 - Personal effects products spending - refers to the sum of spending on the following items:
13.2.1 - Jewellery, clocks and watches
13.2.2 - Other personal effects
13.3 – Social Protection - Social protection as defined here covers non-medical assistance and support services provided to
persons who are: elderly, disabled, having occupational injuries and diseases, survivors, unemployed, destitute, homeless, low-
income earners, indigenous people, immigrants, refugees, alcohol and substance abusers, etc.
13.4 - Other spending - which includes fees for legal services, funeral and undertaker services, fees for birth and marriage
certificates and other similar services etc.
Household goods (BMI only category/BMI calculation) - the sum of spending on furniture and furnishings, household textiles and
appliances, glass, tableware and utensils, home and garden tools and equipment, AV, cameras and computers, toys, sports, gardens
and pets.
Income Definitions
Gross income - refers to income received before tax and deductions.
Net income - refers to income received less any income taxes and social contributions.
Tax and social contributions, % of gross income - refers to tax plus social contribution rate as percentage of total gross
income.
Consumer & Retail Methodology

Connected Thinking
BMI employs a unique methodology known as 'Connected Thinking'. This means that our analysis captures the inter-relatedness of
the global economy, and takes into account all of the relevant political, macroeconomic, financial market and industry factors that
underpin a forecast and view. We then integrate them so as to explain how they interact and affect each other. Our Connected
Thinking approach provides our customers with unique and valuable insight on all relevant macroeconomic, political and industry
risk factors that will impact their operations and revenue-generating potential in the industry/industries within which they operate.
We use a transparent forecasting model as a base for our industry forecasts, but rely heavily on our analysts' expert judgement to
ensure our forecasts capture all of the insights we derive using our unique Connected Thinking approach. We believe analyst
expertise and judgement are the best ways to provide the most accurate, up-to-date and comprehensive insight to our customers.
Consumer & Retail Methodology
For the Consumer & Retail industry we have historical data and five-year forecasts for 295market-level indicators including total
household spending by category, income stratification, CPI and CPI weights (by COICOP categories), population and households.
We look at the consumer & retail space from a household spending perspective.
We source our data primarily from national accounts and household surveys, which are published by national statistics agencies.
Our forecasts are a combination of regression modelling and analyst expert judgement.
Our Consumer analysts interact with other analytical teams in BMI, including Country Risk, Food & Drink, Oil & Gas, Autos, TMT,
Agribusiness, Tourism and Operational Risk. This is to ensure the analysts have a comprehensive understanding of external factors
that may affect the consumer & retail industry outlook either on a market or regional level.
There is a constant rolling cycle of data monitoring, with databases being updated on a quarterly basis. Analysts will use their expert
judgement outside of these cycles to implement forecast changes when necessary.
Industry-Specific Methodology
Our Consumer & Retail forecasts are based on a regression model, using a market's own historical time series and key
macroeconomic explanatory variables from our Country Risk service, mainly private final consumption. In addition, we also apply
analyst expert judgement to refine and finalise the household spending forecast based on exogenous and endogenous variables or
events, not captured by our regression model. During periods of 'industry shock', for example a deep recession, dummy variables are
used to determine the level of impact.
In the Consumer & Retail forecasts, analyst expert judgement might include, but is not exclusive to, business environment changes,
changes in consumer trends, the introduction of new technology and regulatory changes.
The Consumer & Retail industry data can be divided into the following main categories: total household spending by categories,
household income levels and demographics.
Total Household Spending
Total household spending across the main categories of consumer spending, as defined by the UN Classification of Individual
Consumption by Purpose (COICOP).
Where spending data is not readily allocated into the COICOP format, we apply a rigorous and logical approach in allocating data to
align with these categories, and if needed, apply aggregation methods or other techniques to achieve category level data.
We source our historical data primarily from national statistics agencies, complemented by data from the UN, World Bank and other
multilateral sources.
The main categories for household spending forecasts are:
• Food and non-alcoholic drinks

• Alcoholic drinks and tobacco
• Clothing and footwear
• Housing and utilities
• Furnishing and household goods
• Health
• Transport
• Communications
• Recreation and culture
• Education
• Restaurants and hotels
• Insurance and financial services
• Personal care, social protection and miscellaneous goods & services
These main categories can then be divided into the following sub-categories:
Food and non-alcoholic drinks
• Food
• Non-alcoholic drinks
(our Food & Drink service provides breakdown data and forecasts for all food and non-alcoholic drinks categories)
Alcoholic drinks and tobacco
• Alcoholic drinks spending

• Tobacco
(our Food & Drink service provides breakdown data and forecasts for all alcoholic drinks categories)
Clothing and footwear
• Clothing
• Footwear, including repair
Furnishing and home, and recreation and culture
• Household goods spending

• Furniture and furnishings
• Household textiles
• Household appliances
• Glass, tableware and utensils
• Home and garden tools/equipment
• AV, camera and computer
• Toys, sports, gardens and pets
Household Income
Household income includes indicators such as net/gross income per household/capita and number of households earning within
different income brackets. This gives an overview of the purchasing power of households. We source our historical data from
national statistics agencies; however, where these are not available, we source the data from international organisations like the UN
and World Bank.
Demographics
Demographics covers the different types of consumers by age group, sex and urban/rural population. This is important in
highlighting the different consumer groups and the size of each group. Demographic data and forecasts are taken from the UN
population statistics.
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This report from BMI – A Fitch Solutions Company is a product of Fitch Solutions Group Limited; UK Company registration number 08789939 ('FSG'). FSG is an affiliate of
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Consumer & Retail Glossary.....................................................................................................................................................39

Consumer & Retail Methodology............................................................................................................................................43

© 2023 Fitch Solutions Group Limited. All rights reserved.

Copyright © 2023 Fitch Solutions Group Limited.

Consumer Spending Outlook For 2023

Tighter Monetary Policy Amid Double-Digit Inflation To Weigh On Consumer Spending

f = BMI forecast. Source: Central Bank of Egypt, BMI

Insights Into Consumer Spending

EGYPT'S ECONOMIC OVERVIEW

Real GDP, % chg y-o-y 3.8 4.0

Unemployment, % of total labour force 7.3 7.2

Consumer Price Inflation, % y-o-y ave 36.9 16.3

Central Bank Policy Rate, % eop 21.3 12.3

Average Exchange Rate, EGP/USD 34.5 37.1

Rising Inflation Erodes Consumer Purchasing Power

Source: Central Bank of Egypt, BMI

Unemployment Increase Marginally In 2023

Source: CAPMAS, BMI

Wider Economic Issues

Egyptian Households Are Exposed To Global Risks

In order to track our analysis of consumer spending in Egypt, please see:

2023 Consumer Outlook

2022 Consumer Outlook

2021 Covid-19 Impact Assessment

Total Household Spending

Despite Double-Digit Inflation, Household Spending Will Show Real Growth

f = BMI forecast. Source: Egypt CAPMAS, BMI

TOTAL HOUSEHOLD SPENDING (EGYPT 2021-2027)

Rising Inflation Is Weighing On Consumer Purchasing Power in 2023

f = BMI forecast. Source: Central Bank of Egypt, BMI

Significant Demand-Side Risks Exist

Source: Fitch Solutions

Essential And Non-Essential Spending

Essentials Focus In Consumer Spending

f = BMI forecast. Source: Egypt CAPMAS, BMI

ESSENTIAL AND NON-ESSENTIAL SPENDING (EGYPT 2021-2027)

Food, Drink And Tobacco

Outlook For 2023

Food and non-alcoholic drinks spending,

Food and non-alcoholic drinks spending, EGP

Alcoholic drinks and tobacco spending, EGP %

Food and non-alcoholic drinks spending,

Food and non-alcoholic drinks spending, EGP

Alcoholic drinks and tobacco spending, EGP

Food and non-alcoholic drinks spending, EGP

Alcoholic drinks and tobacco spending, EGP

Clothing And Footwear

Outlook For 2023

CLOTHING AND FOOTWEAR SPENDING (EGYPT 2021-2027)

Footwear including repair spending, EGP per

Outlook For 2023

HOUSEHOLD GOODS SPENDING (EGYPT 2021-2027)

Personal Care And Effects

Outlook For 2023

PERSONAL CARE AND EFFECTS SPENDING (EGYPT 2021-2027)

Purchasing Power And Demographic Trends

f = BMI forecast. Source: National sources, BMI

2023 Income Outlook

Improvements To Real Wage Gains For Egyptian Consumers Beyond 2023

e/f = BMI estimate/forecast. Source: National statistics, BMI

HOUSEHOLD INCOME DATA (EGYPT 2020-2027)

Households Disposable Income USD5,000+, % total

Households Disposable Income USD10,000+, %

Fitch Egypt Consumer & Retail Report - 2023-06-01 2

Fitch Egypt Consumer & Retail Report - 2023-06-01 2