A new high-end food retailer, Gourmet, is helping reshape Egypt's supermarket industry.
CAIRO — A few months ago, I decided to challenge Gourmet.
Egypt's most prominent high-end grocery chain had earned a reputation for stocking ingredients that were hard to find anywhere else. For foodies, Gourmet had opened the door to previously inaccessible recipes. I'm not a foodie, but I do have access to The New York Times" cooking app after one of my colleagues generously gifted me a subscription. Standing outside Gourmet's branch in Maadi, I scrolled through the app looking for a dish that was — in orientalist parlance — "exotic." I eventually landed on a recipe requiring several ingredients unlikely to be found in any Cairo supermarket: Thai red curry paste, Fresno or serrano red chile, unsweetened coconut flakes and baby spinach. The dish? Red curry lentils with sweet potatoes and spinach.
This was my first visit to the large Maadi branch, which dwarfs its counterpart in Zamalek. It was mostly empty — just me and a few other shoppers wandering the aisles. It didn't take long to find what I was looking for.
The baby spinach was displayed prominently among other fresh local greens, while the Thai curry paste was nestled in a rack featuring a wide assortment of curries, sauces and other flavorings. I also found locally grown red chilies that resemble serrano peppers — a good substitute. The coconut flakes, however, were nowhere to be seen. Since they were just a garnish, I was about to write them off but decided to ask one of the many employees roaming the shop for help. He quickly led me to a shelf I had browsed twice before but somehow failed to notice had the coconut flakes, stacked between other dried fruits and nuts.
You win, Gourmet — and not just in this challenge. As I searched for my ingredients, I inevitably caught sight of the plethora of the store's signature ready-to-cook dishes. A week later, I ordered Gourmet's margarita pizza and three chicken breasts à la provençale, both pre-prepared and needing only to be popped in the oven. Not always having the time to cook, and squeamish at the prospect of having to order out again, I found their ready-to-cook meals the perfect middle ground. I would clearly become a regular customer.
Gourmet supermarket pioneered ready-to-eat meals with local ingredients in Egypt — Photo: Gourmet Egypt via Facebook
This experience summarizes much about the evolution of high-end food retailers in Egypt over the last decade. Increasingly, supermarkets are offering a wide selection of imported foods, organic local produce, their own lines of prepared meals and ready-to-cook items, all packaged and marketed using novel techniques. Regarded as the apex of Egyptian grocery shopping, Gourmet has played an important role in this transformation. Its emergence has helped to shift trends in the supermarket sector that have grown to represent new realities in the consumption and production of food in Egypt.
Before he founded Gourmet, Jalal Abu Ghazaleh owned and ran AM Foods, a wholesale food supplier to several clients in the fine dining business, including the Four Seasons Hotel. Founded in 1996, AM Foods was small, with a handful of employees, and specialized in providing high-quality imported meats and seafood that weren't available on the local market.
At the time, Abu Ghazaleh hosted dinner parties and treated his friends to some of his premium steaks, he told Mada Masr. It wasn't long before they were asking him where they could buy their own choice cuts of meat, and the idea to cater to individual customers first took shape.
In 2006, Abu Ghazaleh brought in a desk for a new employee and gave him a mobile phone to take orders. Home deliveries were carried out by a part-time delivery person who also worked at Mo'men, a popular fast food restaurant. Two years later, Abu Ghazaleh opened his first brick-and-mortar shop off Ring Road on the outskirts of Maadi and named it Gourmet.
Back then, Gourmet's only means of publicity was word of mouth — and word spread quickly. Gourmet expanded rapidly, and just over a decade later it has established itself as Egypt's premier high-end food retailer with 15 stores and an enviable level of brand recognition. Yet, Gourmet's path to success was anything but straightforward. Just three years after opening its first retail outlet, the company's revenues were severely impacted by the 2011 revolution, with disruptions in supply and new duties imposed on luxury goods.
An even bigger setback came in November 2016, when the government devalued the currency as part of an economic reform program put in place to secure a loan from the International Monetary Fund. The cost of imported goods doubled overnight and the subsequent lack of liquidity — with the Egyptian pound losing half its value — disrupted the supply of many imports.
The devaluation prompted Gourmet to rethink its strategy — one that would come to redefine the company and propel it into a new and lucrative market.
In order to deal with the import crisis, Gourmet pivoted to begin offering a new type of product: locally produced ready-to-cook and ready-to-eat meals, or "food solutions," in corporate speak. The move proved remarkably successful and Gourmet's own food products have become one of the main lures for customers and a major source of revenue. This new business approach was bolstered by a major investment in 2018 by the private equity firm B Investments, which purchased a majority stake in the company for LE125 million.
Gourmet was now competing for a larger "share-of-stomach" — looking to entice customers not only for their grocery shopping needs but for prepared or semi-prepared meals to replace restaurant delivery food.
80% of retail foods are sold in smaller, traditional grocery stores.
As a leading retailer in both specialized groceries and prepared foods, Gourmet represents Egypt's latest stage in a decades-long, worldwide trend toward the increased centralization of food shopping, the globalized availability of ingredients and food products, and of the trading of home cooking for so-called convenience.
Prior to the advent of the modern supermarket, shopping for groceries in Egypt, as in much of the world, was a multi-faceted endeavor.
Vana Celic, an 88-year-old Alexandria resident, recalls how in the 1940s, grocers displayed goods like sugar, white cheese and salted fish in large wooden barrels while portions of halawa (sesame candy) would be cut from huge slabs. Everything would be weighed and placed into paper bags. Packaging and branding were uncommon.
The same could be said of Britain in the postwar period, when a single visit to a present-day supermarket replaced trips to multiple shops: a grocery store for basic items like sugar, butter and canned fish; a greengrocer for fruits and vegetables; a butcher for meat; a baker for bread, and the milkman for milk, as documented in the book The Grocers: The Rise and Rise of the Supermarket Chain by Andrew Seth and Geoffrey Randall.
During this same period, upper and middle-income families living in downtown Cairo, like Vana's, would often go to Al-Souq al-Faransawi (the French market) near Al-Azhar, where food vendors lined the streets displaying their fruits and vegetables in woven circular baskets and sold live poultry from rickety wooden crates stacked high atop one another. Vana remembers how cooks from wealthy households would be chauffeured to the market, where they and other household staff would sit at a nearby cafe, while the vendors would take orders of what was needed and then promptly load it into the car as they sipped their coffees. While these markets still operate widely in Cairo, they are no longer frequented by the city's more affluent residents.
In the 1970s, policies of economic liberalization first began to remove long-standing restrictions on imports, prompting the emergence of a new breed of small grocers that straddled the line between traditional grocery and supermarket, offering foreign products ranging from Dr. Pepper to anchovies to various cheeses. While these new grocery stores were limited in number, they came to be well-known within Cairo's wealthier neighborhoods.
I vaguely remember supermarkets as a child in the early 1990s. They weren't as numerous as they are now. But even then, my mother assures me, our food was usually bought separately from the grocer, the greengrocer, the fruit vendor (separate from the greengrocer in Egypt until recently) and the butcher. And the range of products on sale was rather limited.
"Workers in supermarkets don't care because they're not the owners."
The customers' relationships with the local grocery store, butcher and poultry shop is still prevalent in Egypt: 80% of retail foods are sold in smaller, traditional grocery stores. But the remaining 20% — which mostly encompasses wealthier customers — slowly shifted over the years and by the late 1990s, modern supermarkets had become a staple of affluent neighborhoods in Cairo, Alexandria and coastal resorts. At the turn of the millennium, supermarkets continued to proliferate more widely and they began using their bulk purchasing power to offer products at discounted rates compared to their more traditional counterparts.
Supermarket chains are now a major player in the food retail market. Although they comprise just four percent of the total number of food outlets, modern retail channels — such as supermarkets and convenience stores — nevertheless account for around 20% of total sales in the US $17.5 billion food retail sector, and have a projected growth of 15 to 20% over the next few years, according to a 2019 report by the US Department of Agriculture's Foreign Agricultural Service.
Yet there are concerns about the continued spread of modern supermarkets, which centralize, corporatize and homogenize food shopping, leading some target customers to eschew outlets like Gourmet in favor of more traditional food sources.
Mostafa, an old classmate who lives in Maadi (a supermarket haven like Zamalek) dislikes supermarkets and describes outlets like Carrefour as "monstrous." Mostafa's concerns about supermarkets are centered around his experience as a consumer and the impersonal nature of supermarket chains, as well as the tendency for supermarkets to elbow out small businesses that he considers more trustworthy and whose products he deems of a higher quality.
"I still shop from small vendors —the butcher, the grocer, the corner shop. You know who owns them," Mostafa says. "Workers in supermarkets don't care because they're not the owners. You don't get the freshest products, which are often stacked in the back to sell the older ones. I prefer vendors that aren't corporate-owned." Mostafa prefers to shop for food at small outlets, both from local vendors as well as from independent sellers of higher-end artisanal products.
However, consumers like Mostafa appear to be the exception. Agricultural researcher Saqr El-Nour found that growing culinary trends, such as healthy eating, have largely resulted in consumers purchasing organic foods from city-based vendors who, more often than not, are connected to large businesses that have capitalized on the emerging demand for these products. Organic produce is generally not available in traditional souks (open-air marketplaces) and smaller vendors who offer healthy food options find it hard to compete with large corporate players like Seoudi or Gourmet.
Supermarkets and food outlets like Gourmet still only represent a fraction of the market. Whether their share will grow in the future is difficult to predict, but what is clear is that the supermarket landscape has flourished over the past decade, and Gourmet — that expensive little store that started out with one branch offering Canadian lobster tail and certified Angus beef — has been at the center of this transformation.