Spending Trends in Supermarkets: Analysis of the Georgian and Global Markets

Between January and May 2024, the average amount spent per shopping trip in Georgian supermarkets was 16 GEL. This figure, published by TBC Capital, reflects the state of the fast-moving consumer goods (FMCG) sector in the country. According to the data, the average single transaction value has been declining over the past three quarters. In the first quarter of 2024, spending in supermarkets fell by 4.2%, and in the second quarter, the decline was 2.7%.

This trend can be partly attributed to the increasing number of supermarkets, both in Tbilisi and in the regions. As of 2023, there were 1,350 supermarkets in Tbilisi, and by January-May 2024, this number had grown to 1,546. Similarly, in the regions, the number of supermarkets increased from 1,089 to 1,456. The rise in the number of supermarkets provides more accessibility for consumers, which leads to more frequent store visits but smaller purchases per visit. Additionally, this growth may be driven by increased urbanization and the expansion of the retail sector, which gives consumers more options and convenient access to stores. Consequently, consumers tend to buy products more frequently in smaller quantities, thus reducing the average spending per purchase.

Examining similar trends in other countries worldwide helps us better understand the spending process in supermarkets within a global context. In developed countries like the United States and the United Kingdom, average spending per shopping trip in supermarkets is significantly higher than in Georgia. For example, in 2023, the average value of a single purchase in the United States was $60 (about 160 GEL), while in the United Kingdom, it was approximately 40 pounds sterling (around 135 GEL). This difference can be attributed to the purchasing power of the population, product pricing levels, and lifestyle. In the US and the UK, high consumer spending is linked to high income levels and the availability of many high-value products, which significantly raises the average cost of a shopping basket. Additionally, retail chains in these countries, such as Walmart and Tesco, often offer deals and promotions that encourage consumers to make bulk purchases.

In Europe, average spending per shopping trip in supermarkets is also high. In Germany, for instance, the average value of a single purchase is 45 euros (about 130 GEL), indicating that Germans tend to buy larger quantities of products per visit. This may be due to the German tradition of shopping once or twice a week, whereas in Georgia, consumers shop more frequently in smaller amounts. Furthermore, German consumers often choose high-quality and organic products, which raises the value of a single purchase. The well-developed logistics networks in Germany’s retail sector also contribute to maintaining product quality, providing consumers with more incentives to purchase higher-value items.

In neighboring Turkey, the average amount spent per shopping trip in supermarkets ranges from $25 to $30, which is approximately 70-85 GEL. This figure, based on 2023 studies, indicates that spending in Turkish supermarkets is higher than in Georgia but significantly lower than in developed European countries. This could be due to Turkey’s large population and relatively lower per capita income. The spending dynamics in Turkish supermarkets can also be explained by consumer purchasing habits, which involve frequent small purchases, often at relatively higher product prices. Turkish consumers frequently look for discounts and promotions, increasing the frequency of purchases but reducing the average value per transaction.

In Georgia, the decline in average spending per shopping trip in supermarkets over the past three quarters can be explained by several factors. First, the increase in the number of supermarkets may have led to the fragmentation of consumer purchases—more stores mean more opportunities for frequent, smaller purchases. Moreover, inflation and rising product prices have also impacted consumer behavior. In the first half of 2024, the inflation rate in Georgia exceeded 8%, which forced consumers to cut back on spending and make more economical choices. This trend is also reflected in consumers increasingly using special offers and discounts to reduce costs. Additionally, financial constraints and rising living expenses often compel consumers to buy cheaper products, reducing the amount spent per shopping trip.

In Western European countries, spending in supermarkets is much higher, partly due to higher purchasing power. It is also important to note that these countries often sell more expensive and premium products, which increases the value of a single purchase. In Georgia, on the other hand, consumers frequently take advantage of discounts and try to make economical choices, which lowers single-visit spending. It is also important to consider that some of the products purchased in Georgian supermarkets are of relatively lower quality, which affects the average value per purchase. Georgian consumers also tend to choose locally produced goods, which are cheaper compared to imported products, further reducing average spending.

Consumer buying habits and culture also play a major role in the US and Europe. For instance, Americans often make bulk purchases, as many products are sold in wholesale quantities, and consumers try to save money by buying in larger quantities. In Georgia, however, due to relatively lower incomes, smaller but more frequent purchases are more common. The American model involves large retail chains like Costco and Walmart, where consumers can receive significant discounts on bulk purchases, increasing the value of each purchase. Additionally, in the US, consumers have more opportunities to use loyalty programs, allowing them to receive bonuses and rewards, which also drives up single-visit spending.

The average amount spent per shopping trip in Georgian supermarkets, at 16 GEL, is significantly lower compared to developed countries. This points to both the relatively low purchasing power of the population and the impact of the growing number of supermarkets on consumer purchasing patterns. It is important for supermarket owners to improve customer attraction strategies, including special offers and discounts, to increase the value of each shopping trip.

In the future, if the expansion of supermarket chains in Georgia continues, it is possible that the average value of single purchases will decrease further, as consumers are more likely to use nearby stores for smaller purchases. Considering this, it is necessary to implement more advanced marketing strategies to encourage consumers to make larger purchases.

In a global context, it will be important for Georgia to consider international experience, which will allow the country to apply marketing strategies more effectively and increase consumer loyalty. Sharing experiences from countries with high purchasing power and implementing best practices may help Georgia increase consumer spending per visit and develop the retail sector, which, in turn, will stimulate economic growth in the country.