The Evolution of Modern Grocery Market in Pakistan

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“The Evolution of Modern Grocery Market in Pakistan.”
A research project to study changing consumer buying patterns and opportunities for new entrants in the modern grocery sector.


Adavanced Research Methods MBA-Evening Program Section ‘E’

Submitted on November 19, 2012

Table of Contents
Titles Page No.

Prefatory Information Abstract Acknowledgements Executive Summary Introduction Methodology Research Findings Conclusion Recommendations Appendices References

02 03 04 05 06 08 09 13 14 15 22

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Prefatory Information
Research Topic “The Evolution of Modern Grocery Market in Pakistan.” Research Background The traditional food retail sector (small neighborhood stores, street vendors, “general trade” stores, etc.) comprise about 95% of all food retail stores in Pakistan while the modern retail sector (hypermarkets, supermarkets, discount stores, etc.) make up the remaining 5%. Over the past few years international retailers have taken advantage of the growing opportunities in this market. Well-known European retail giants Makro, Metro, and Carrefour (Hyperstar) have opened stores in all major Pakistani metropolitan cities. The port city of Karachi alone has at least five large retail stores that serve more than 19 million people. With a growing middle-income class (estimated at about 25% of the total population), increasing urbanization, increasing popularity of international food products, and a growing number of international restaurants and fast food chains, Pakistan is emerging as an expanding market for U.S. high-value agricultural products. The overall food retail and wholesale business accounts for 17% of Pakistan‟s GDP. These large retail stores have been able to tap into the changes in consumer lifestyles and higher disposable income. Emerging technologies have also contributed to the emergence of the large food retail superstores, which offer a wide range of value added products and services to price conscious middle income consumers. Convenience stores in Petrol/Gas stations are also providing an additional option for consumers and their popularity among Pakistani consumers is rising. To know precisely the driving forces that lead changes in the consumer buying behavior and furthermore to anticipate the future demand of modernized grocery stores and hypermarkets which would ultimately guide investors towards an opportunity and would let them know the critical market factors and consumer needs on the basis of which they should design their businesses to gain maximum market share in minimum amount of time and resources. Page | 2

“The Evolution of Modern Grocery Market in Pakistan.” The core objectives of our research are comprehensively explained and backed by the results and interpretations, with graphical illustrations that clarify the main consumer tastes and preferences that are the agents of changing buying patterns being the reason behind the increased number of modern grocery stores in major cities of Pakistan which is linked to our second objective that is more towards the investment opportunity for local and foreign venture capitalists in the mentioned sector.

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First and foremost, we would like to thank Almighty Allah for enabling us to achieve the completion of our project report effectively, next we would like to thank to our course mentor of Advanced Research Methods-E, Mr. Salman Rabbani for the valuable guidance and advice. He inspired us greatly to work in this project. His willingness to motivate us contributed tremendously to our project. We also would like to thank him for showing us some examples that related to the topic of our project. Besides, we would like to thank all those participants, colleagues and class mates for providing us with their valuable insights and responses that enabled us to complete this project.

Group Members Sandhya Talreja Talha Abid 1235220 1235182

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Executive Summary...
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