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Home > Food and Beverage > Food > Food - General Markets
Bahrain Food and Drink Report Q3 2009
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Bahrain has moved into second position in BMI’s regional Food & Drink Business Environment Ratingstable for Q309. A decline in crude oil prices coupled with a marked decline in private investment hasforced BMI to revise down the kingdom’s GDP forecast to reflect a 0.55% contraction in 2009. AlthoughBahrain does not provide investors with the premiumisation potential of the UAE or the large markets ofEgypt or Saudi Arabia (Bahrain has a GDP per capita of US$25,628 and a population of 1.1mn), its mainattraction is its excellent regulatory environment, which is among the Middle East’s most liberal. Thekingdom’s openness to foreign investment has attracted big name mass grocery retailers (MGRs) such asCarrefour and Waitrose despite the small size of the market as discussed in BMI’s recently publishedBahrain Food & Drink Report for Q309.
In Q209, UK-based premium-end retailer Waitrose announced its intention to launch its first supermarketin Bahrain by 2010 at the state-of-the-art US$800mn Villamar development. It will mark Waitrose’ssecond foray into the Middle East following its entry into the UAE. The retailer will target pockets ofextreme wealth across the kingdom.
Waitrose’s imminent entry adds to an impressive array of retailers that include Carrefour (in a jointventurewith its Middle East partner Majid Al Futtaim), UAE-based EMKE and France-based Casino(in partnership with Fu-Com International).
BMI has forecast MGR value sales to grow by 31.8% through to 2013. The expansion will bespearheaded by the supermarket and hypermarket segments. Declining real estate prices could speed upthe pace by which the country’s retailers launch stand-alone outlets. Presently, a number of supermarketsand hypermarkets are located adjacent to shopping malls, a common feature of the Middle East’s MGRlandscape. Region-wide apathy towards discounted goods, which are perceived to be of inferior quality,means the discount segment is unlikely to make any headway for the foreseeable future.
The entry of international and regional MGR companies is likely to hasten the pace at which Bahrain’sgrocery retail sector formalises. By 2017, BMI forecasts that the organised MGR sector will account for57% of total grocery sales (up from an estimated 46% in 2007). Retailers seeking entry are likely to investsooner rather than later as the kingdom’s small population means its MGR market is likely mature overthe next five to ten years.
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