Carrefour’s Middle East and East African franchisee Majid Al Futtaim will invest EGP16bn ($996.3m) in the country over the next 3 years. EGP14bn ($866.2m) of the EGP16bn will be spent on one mega mall. Trendtype analyses where the spend will go and the impact it will have.
In 2002 it launched its first mall, City Centre Maadi in Cairo, which has 28,543m² of GLA. In March 2017, Majid Al Futtaim opened its ($708m) Mall of Egypt project, dubbed Egypt’s first mega mall. It has an artificial ski slope, a 2,473 capacity cinema and includes 165,000m² of gross leasable area (GLA). Its City Centre Almaza, which has 103,000m² of GLA opened in September 2019. In May 2019 it opened one of its newer, regional malls in Ismailia. The Ismalia mall has 14,000m of GLA and 14 retail outlets within in it.
With $866.2m earmarked for just one mall, we are looking at another mega mall, likely larger than the Mall of Egypt. It will be a major change in the retail landscape in Egypt. We think the new mall is likely to be sited in or near Alexandria.
The question is what the remaining $130.1m will be used for. Smaller Carrefour stores cost approximately $2m each – so in theory up to 65 new stores. Smaller shopping malls anchored by a Carrefour hypermarket, like that in Ismailia, cost around $12m – so equivalent to eight malls. Realistically then we anticipate 2-3 new regional mall complexes and an additional 45-50 new supermarkets. It is a step change for Carrefour, which will comfortably be the supermarket retail leader in Egypt. [Note – fellow Emirati supermarket chain LuLu has consistently announced plans to invest $500m in Egypt to launch a series of new hypermarkets but never actually followed up.]
Majid Al Futtaim is already in the middle of an expansion phase in Egypt, with a plan to have launched 20 new supermarkets in 2019 alone. Since the end of 2015, Majid Al Futtaim has invested EGP28bn ($1.73bn) in Egypt.
In other news, the long awaited first Carrefour outlet from Majid al Futtaim in Uganda, originally due to open in January 2019, will open on December 16th.
