Retail in Iran
A retail revolution is sweeping through Iran. The sector witnessed significant transformation in the past-from small-unorganized families owned retail format to organized retailing. Over the last few years, retail has become one of the fastest growing sectors in the Iranian economy. There is chaotic activity in the sector in terms of expansion, entry of international brands and retailers as well as focus on technology, operations and processes. All these present a tremendous opportunity in this new high growth industry . With the growth of malls, multiplexes and hyper markets, the consumer is being exposed to a new kind of shopping xperiences and services which is quietly and surely redefining their expectations from shopping. Today consumers no longer think “expensive looking” means “expensive”. With retail ambience getting upgraded, clearly the neighborhoods anjireei( Chain) store are becoming part of past for hypermarket consumers. Consumer is getting used to having option readily at hand when they step out to make final purchase decision without much dissonance, with growing time constraint and option. Customers are being encouraged to come back again and buy more by providing better services.
Grocery Retailing is Heading towards
Modernization in Iran
The entry of the multinational retailer Majid Al Futtaim ( Hyper Star ), and it’s very strong performance, had a positive effect on the modern retailing channel in the country, especially in the grocery categories. As a result, many small grocers converted to supermarkets, although they kept their independent position. Bigger outlets, better arrangement of products and better service to consumers were all apparent in the grocery channel.
Iran’s retail industry has been recording exceptional growth over the past few years. With rising urbanization, the demand for new products is expected to go up, which in turn will boost Iran’s retail industry. Iran’s growing market is attracting various international retailers, which are now collaborating with domestic players for production under license. Despite global slowdown, Iran registered a double-digit growth in retail sales during 2010 and is anticipated to grow with around 14% during 2011-2014.
The Middle-East region has become one of the world’s most desirable retail environments in terms of investments and revenue generation. The reports all over the world say the expansion of retail space in the Middle East, and the construction of new malls will provide expansion opportunities to both the national and international retailers in the region. Not mentioning that at this time there are only few competitors, more retail companies are expected to invest in Iran within coming years, there are rumors of big companies planning to join Iran retail industry.
Some of retail chains in Iran:
1. MAF Pars (Hyperstar):
The investor of this company is Mr. Majid Al Futtaim.
Their first hypermarket was opened on August 23, 2009.
Their main goal is to sell lots of products with best quality and price,
They say “We listen, because what customer has to say is important for us. We learn, because by learning we can grow, We manage, because with managing and processing we will have a successful tomorrow,
At this moment they have 3 hyper markets, Tehran, Shiraz and Isfahan Plus two Super Markets, one in Tiraje and one in Sattari,
They have plans to open the forth hyper market in Kish, there were some plans for Mashhad as well, but there are too many difficulties in Mashhad,
There are plans to open Supermarkets as well,
According to their previous CFO, Mr. Le roux, Iran has great potential for
Super Markets and Discount markets,
They have 5 Merchandise
LHH: Light House hold,
HHH: Heavy House hold, Textile,
FM : Fresh Market (Including bakery)
FMCG: Fast moving consumer Goods
PL: Private Label will be added soon.
They have the same products in each of their stores, and between 30,000 to 40,000 products,
They manage to keep their price low
since they have the benefit of being
well known by the suppliers,
Shahrvand Group is a private group that started their work on 1994; their first store was open on Beihaghi St. which still is one of their best stores, Their Main base is Tehran.
They have Around 32 stores in Tehran:
In general Shahrvand has the same Product groups as Hyper star, but they don’t have the same products in each store because of the different selling areas square meters In each store,
With foreign investors entering Iran retail section, Shahrvand started to grow and learn as far as the could see, Before there was no professional way for product layout or many other methods that professional retailers use, but now, they are learning quick, Shahrvand even started giving new Services to their customers including below services:
Customer Club: This club is recently established to identify our loyal customers and issue them membership card with especial rewards and benefits such as Events information, Constant communication, Discounts and Especial delivery …
VIP Cards: The holders of these cards are offered special services according to stores possibilities such as parking, purchase guide and escort, shipping the goods to the car, and etc. this card doesn’t include points and discount.
Shahrvand claims to have following Services: Discount, Grocery, Convenience stores, Cash and Carry and Hyper markets, this claim comes from the different sells area square meters, the small stores are considered as discount or grocery and etc.
Not mentioning they have no stores that obey the rules of discount,
Since the real meaning of these services is not understood well in Iran, most of the Iranian retailers think they are active in all of the retail concepts, most of Shahrvand stores are obeying supermarket system, also they have few Hyper markets with only a small diifrence, a hyper market should be only one floor but in Shahrvand they have few floors.
Refah group is a private chain store based in Tehran as well.
They are known to have 217 branches all over Iran, also claiming to working in Discount, Grocery, Convenience stores, Cash and Carry and Hyper markets categories.
They started their work on 1995.
This group has the same weaknesses of Shahrvand, They have different list of products in each store and they usually don’t have the right product layout…
Refah also started giving new Services to their customers including below services:
- Refah Card: Besides accepting Bank Credit Cards, RCS is offering Refah Card. Short term credit with no commission are main advantages of this card. Other benefits are as follows:
- Ease of purchase
- Limited cash needs
- Online transaction
Refah has the same group of products as Shahrvand and Hyperstar,
4. Everest Modern Pars:
Everest modern pars started their business in 2012; The investor of this group is Hayat Co. in Turkey,
Hayat Co. Also owns Pars Hayat Company in Iran.
Mainly Everest modern pars is planning to have four concepts of Retail
- Hyper Markets
- Super Markets
- Lux Markets
- Discount Markets
Right now they have one hyper market in Tabriz, 120 Open Discount stores in Tehran .
The main job was started with two of the best retailers In Turkey, Mr. Yilmaz Baskir as Hyper market CEO and Mr. Vedat Diriker as Discount CEO.
Everest Moderns now active projects are as follow:
The hyper market by the name of All in All has below qualities:
Vast selling area with variety of products and shopping malls.
The supermarkets by the name of Forona are as below:
The ability to provide daily needed products and fresh products at the same time, this type of store is something between hyper markets and discount stores.
Hyper markets have between 30000 to 40000 products, and Discount markets have between 700 to 1500 products, hyper markets are located in one place but discount stores are near customers houses…
Super markets have between 2500 to 10000 products and are rather close to customers houses. Also you can never sell open fresh products in discount stores but super markets have fresh products as well.
Discount markets by the name of Canbo are as below:
Varity of 800 products in stores between 180 to 300 Square meters.
Close to customers houses and always better price than the competitors,
The main goal is to have two brands for each product, one well known and maybe a little expensive and the other, a not very well known brand with a good or even better quality and much better price.
The newly opened stores are highly success full, at first the layout of products was not customer likable but after a while people got used to the way of discount and became fans of this stores.
Most of these newly opened stores even pay out their own rents.
Hami super markets have 17 branches all over Iran, 5 branches are placed in Tehran, with total 28000 Square meters selling area.
They started their work on 2008, unlike the other Iranian groups Hami is 100% Private.
They also have LHH, HHH, Textile, Fresh market and FMCG products.
Though they don’t have enough experience (especially when it comes to product layout) they have managed to have a successful business.
Newly Started Soft Discount stores, soon to become main competitors as the second Discount system in Iran, Number of SKU’s are about 1200.
They are targeting to grow fast in the Retail Industry. Soon Haft is planning on opening a Hyper Market named