Distribution Networks in Algeria
Types of Outlet
Located in the city center. They stock basic products at the lowest price, while displaying imported goods which are often quite expensive.
Taking advantage of the increase in their purchasing power over the last few years, the middle classes are more inclined to shop in hypermarkets and supermarkets, especially ones under local names.
Carrefour, Promy (Groupe Blanky)
- Discount stores
1 supermarket at Pins Maritimes (a cooperative).
El-Meliane (Groupe Blanky)
- Large mini-markets
2 pilot shops. There is a plan to set up a hypermarket in the capital and 135 Métro style hypermarkets, country-wide.
- Shopping Malls
One is under construction at Bab El Zouar with an area of 32 000 m2 (opening autumn 2008). Others are planned in Algiers, Oran, Annaba and Constantine.
- Traditional shops
Algerian consumers continue to shop in the traditional way at the corner shop or in small mini-markets.
- Markets, often open-air
For fruit and vegetables. In most areas of towns, with a wide range of seasonal products.
Evolution of the Retail Sector
- Growth and Regulation
- The distribution market has, for a long time, been the domain of public companies. But, for the last few years, thanks to a wave of privatization, foreign - and especially French - companies have been taking an interest in the Algerian market.
- Market Shares
Algeria has a well developed distribution system which is shared between public and private companies. State firms sell mainly basic foodstuffs, pharmaceutical products and imported industrial material. The majority of distributors are private companies, especially in the equipment sector. As it were, in spite of the presence of public companies, the retail trade is exclusively controlled by private shopkeepers.
The Blanky group dominates the foodstuffs sector. It has taken over the stores which were previously managed by the State firm "les galeries algériennes". The Promy group is also a large one, and offers various types of products: textiles, electrical appliances, foodstuffs of which 75% are produced in Algeria. Alongside them, there is a multitude of small retail outlets. For example, Danone products (40% market share for fresh dairy products) are sold above all in small local shops.
The UGCAA (General Union of Algerian Shopkeepers and Craftsmen) encourages foreign distributors to set up in Algeria, as, in its opinion, this would reduce the weight of unofficial trade; this is thought to have represented 35% of commercial activity in 2004 spread over 2 400 unoffficial markets (irrespective of the sector of activity) and 500 000 shopkeepers. As a comparison, at the Register of Commerce, only 648 supermarkets and mini-markets are registered. However, the large foreign stores are discouraged by the cost of the investment and the complexity of Customs. This is especially the case of Carrefour which is still hesitating about opening Champion stores in the country.
For their part, the small local shops are not worried about foreign companies setting up; they consider that mass marketing meets the needs of more well-to-do customers than theirs. Given that the purchasing power of most Algerians remains low, they continue to prefer shopping at the local shopkeeper's.
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