The Food Retail Sector in Bangladesh Report
Report Highlights:
Modern organized food retailing constitutes about 8 percent of Bangladesh’s estimated $16 billion food retailing sector and is estimated to be growing at 15 percent per year. Overall retailing is growing about 7 percent per year due to both economic growth and urbanization. The top 20% of the population in terms of income accounts for 41.4% of total consumption, implying modern retail has the potential to quintuple in turnover with time.
General Information:
Introduction
The nature of the food marketing system in Bangladesh is shaped by the innumerable small farmers spread throughout the country and the small size of marketable surpluses of the crops they grow. Assembly of these widely dispersed and small marketed quantities is costly and inefficient. At the same time, imported food items, ranging from primary commodities to processed food products, reach numerous Bangladeshi retailers after passing through a long and complicated process. Food is retailed in approximately 14,000 small-, medium- and large-scale markets across the country. Excluding activities of the government’s Public Food Distribution System (PFDS), trade in all agricultural products is largely handled by the private sector. The government’s general agricultural marketing policy is to allow free play of market forces in determining prices and encouraging more participation from the private sector.
Status of the Retail Market in Bangladesh
Retail trade is a traditional business in Bangladesh. Its expansion is keeping pace with the country’s population growth and changes in consumption patterns consistent with economic growth. This expansion has not been structurally organized. Until recently, retail had never been perceived as an industry, but rather as an individual or family business with a very limited scope for organized expansion. Little to no market information is available on the retail sector, though industry sources indicate that the size of the food retail sector in Bangladesh could have been $16 billion in 2010, and the number of retail grocery shops could number more than 1 million. Retail is a large source of employment in Bangladesh (12 percent), and together with wholesaling it contributed a combined 14.3 percent to Bangladesh’s GDP in FY 2010/11. Retail and wholesale growth averaged over 7 percent in the last decade (Bangladesh Bureau of Statistics, 2011).
