CAIRO: Germany’s Metro Group said on Sunday it would open its first wholesale store in Egypt this month and might add about 20 more, a move Cairo said would encourage more efficient internal trade and cut consumer prices.
The government is seeking to encourage more internal trade with plans to set up zones on the outskirts of big cities to improve logistics and food storage. Deals for setting up three such zones will be signed later on Sunday.
Metro said its new 10,000 square-meter facility in the Cairo area would offer 20,000 food and other products. It opens on June 30 and a further two stores, also under the Makro brand, are planned to open this year, it said.
Some 90 percent of products on offer will be Egyptian.
Trade Minister Rachid Mohamed Rachid told a joint news conference with Metro executives that the development with Makro would boost Egyptian agriculture and improve supply chains.
"Agriculture will benefit a lot from this project because it will improve ways of displaying agricultural goods. More importantly, it will shorten (supply) chain links so the producer will get a better price and the consumer will get a price," he said.
Inflation remains stubbornly high despite falling from more than 20 percent in 2008. It was 10.5 percent in May.
Metro said it was considering about 20 stores in the longer term but did not give a precise timeline. The stores, costing about €20 million ($27 million) apiece, will serve traders, hospitality professionals and businesses.
Metro Group has previously said it sees the move into Egypt, with a population of 78 million, as an important step into the growth region of the Middle East and North Africa.
The government is setting up three logistics and storage zones in Luxor south of Cairo and Beheira and Daqahliya north of the capital, cabinet spokesman Magdy Rady said. The zones would be offered to private developers, he said.
"We will encourage governorates to create logistic areas. We have a problem in storage spaces and the efficiency of agriculture storage. The chain is not efficient," he told Reuters, adding that this initiative would help address the issue.