The Supermarket Boom in Georgia

As of May 2024, 51.3% of the retail sector in Georgia is controlled by three major supermarket chains. According to an FMCG sector overview published by TBC Capital, the largest share of the market is held by “Nikora,” “Ori Nabiji,” and “Carrefour.” The large market share controlled by these three players indicates high concentration in Georgia’s retail sector.

According to the report, “Nikora” holds an 18.9% share, “Ori Nabiji” 18.8%, and “Carrefour” 13.6%. For comparison, during the same period in 2023, “Nikora” held a 19% share and “Carrefour” 15.5%. Besides these three companies, other notable market players include “Spar” (12%), “Magniti” (9.2%), “Daily” (4.8%), “Agrohub” (4.1%), “Goodwill” (4.2%), “Gvirila” (1.9%), and “Universami” (2.9%). These figures indicate that a few major players dominate the retail sector, while the remaining market share is held by relatively smaller companies.

In recent years, the number of supermarkets in Georgia has grown significantly. In Tbilisi, the number of supermarkets increased from 1,350 last year to 1,546, while in the regions, the number grew from 1,089 to 1,456. This growth is mainly linked to the expansion of the retail sector and efforts to meet the growing demand of consumers. The increase in the number of supermarkets also points to growing competition in the retail sector, as more stores provide consumers with a wider choice, ultimately leading to better services and improved prices.

Globally, the retail sector has different characteristics and trends. In developed countries such as the US, the UK, and Germany, the retail market is dominated by large supermarket chains that hold a significant market share and create a highly competitive environment. For instance, in the US, Walmart, Kroger, and Costco dominate the retail market, while in the UK, Tesco, Sainsbury’s, and Asda are the leading players. The retail sector in these countries is distinguished by offering diverse products and services to consumers, which helps increase customer loyalty. At the same time, companies have developed extensive logistics networks and online shopping services, offering consumers a simple and convenient shopping experience.

In Germany, the retail market is dominated by Aldi and Lidl, which are known for their low-price strategy and affordable products. The German retail model is particularly efficient as it focuses on operational efficiency and low product prices. This allows consumers to purchase high-quality products at affordable prices, creating a competitive advantage. One of the main factors in the success of retail in Germany is advanced logistics and automation, which enable companies to reduce operating costs and increase productivity.

Compared to Western countries, emerging markets such as Turkey, Azerbaijan, and Armenia are still developing their retail sectors. In Turkey, the market features several major players such as Migros and CarrefourSA, but small local chains that are closer to consumers and focus on special offers also play a significant role. Independent stores also play an important role in Turkey’s retail sector, offering locally produced goods to consumers, which increases customer loyalty.

Georgia’s retail sector is relatively small but rapidly growing and developing. The market concentration, with three large supermarkets holding more than half of the market, suggests that competition for smaller players is relatively weak. However, at the same time, this concentration allows large companies to allocate more resources to infrastructure development, service quality improvement, and customer satisfaction. For the further development of Georgia’s retail market, it will be important to introduce loyalty programs and offer additional services to customers, helping companies cope with competition and retain customers.

The expansion of the market and the increase in the number of supermarkets positively impact consumer purchasing options. However, alongside market growth, it is necessary to study consumer needs more deeply and maximize their satisfaction. Sharing experiences from Western countries, such as improving operational efficiency, introducing loyalty programs, and offering diverse products to customers, will be important for Georgia’s retail sector. Moreover, the digital transformation of supermarket chains, including the development of online shopping platforms, is essential, allowing consumers to purchase products without leaving their homes.

Another challenge for Georgia’s retail sector is price stability and the impact of inflation. Relatively low purchasing power and high inflation rates influence consumer purchasing ability, placing more responsibility on supermarkets to regulate prices and effectively use marketing strategies. It is necessary to apply marketing strategies that allow consumers to benefit as much as possible from discounts and special offers, thereby enhancing customer loyalty and increasing sales.

The future holds great potential for Georgia’s supermarket business. The retail sector is expected to continue growing both in Tbilisi and in the regions. The expansion of supermarket chains and the opening of new stores will increase consumer accessibility and intensify competition, ultimately leading to better services and more affordable prices. It is also expected that supermarkets will increasingly rely on digital technologies, including the development of online shopping and the provision of more flexible services for customers.

Considering global trends, Georgia’s retail sector should focus on developing loyalty programs, which will help maintain customer retention and market stability. Drawing on the experiences of Western countries, it is important for Georgian supermarkets to use discount and special offer strategies that increase customer engagement. Additionally, the development of new technologies, such as mobile applications and digital payments, is crucial to simplify and enhance the customer experience.

Georgia’s retail sector will continue to thrive if it maintains a customer-oriented approach and continues to leverage modern technologies and marketing initiatives. In the long term, it is anticipated that Georgia’s retail market will expand even further, contributing to economic growth and improving the quality of life for consumers