Supermarkets finally get critical footfall

Highlights:

• Bangladesh supermarkets grow rapidly after VAT relief and rising consumer trust
• Urban shoppers prefer convenience, hygiene, quality, and organised retail experiences
• Shwapno nearly doubled stores and daily customers within three years
• Smaller families and working women drive supermarket shopping demand upward
• Local conglomerates and foreign retailers heavily invest in Bangladesh's retail sector
• Organised retail still represents only five percent of total market

Supermarket chains in Bangladesh are witnessing a sharp rise in customers and store expansion, driven by VAT relief, changing urban lifestyles and improved consumer trust that are reshaping how middle-class families shop for daily essentials.

The shift is accelerating across Dhaka and major urban hubs as supermarkets draw a wider demographic with the promise of convenience, hygiene, and a more organised shopping experience.

Industry insiders note that Bangladesh's organised retail sector has hit a new growth spurt over the last two years, fuelled by a surge of heavy investment from local conglomerates and international retailers.

Within the last three years, the country's largest supermarket chain, Shwapno – operated by ACI Logistics Limited, has nearly doubled its daily customer traffic. According to the company, the number of outlets has increased from 507 stores three years ago to nearly 1,000, while daily shoppers have risen from around 65,000-70,000 in 2023 to nearly 143,000 at present.

Infograph: TBS

Shwapno Chief Executive Officer Sabbir Ahmed said the withdrawal of additional VAT on supermarkets in late 2024 played a major role in boosting customer growth.

"For nearly 18 years we have worked to build customer trust. People now understand that supermarkets are not only for wealthy consumers," he said. "Consumers are giving more importance to hygiene, quality assurance and convenience. We have recorded more than 20% growth over the last two years."

He said improved cold-chain facilities, food safety standards and better customer experience had helped supermarkets attract shoppers from different income groups.

Quamrul Hasan, chief business officer of ACI, said, "People now want organised shopping environments where they can buy everything under one roof without hassle. Urban consumers are becoming more conscious about food safety, product authenticity and service quality."

Retail experts say the sector is also benefitting from wider social and economic changes. Urban families are becoming smaller, more women are joining the workforce, and consumers are increasingly looking for faster, cleaner and more organised shopping experiences. 

Digital payments, loyalty programmes and promotional campaigns are also helping modern retail chains gain popularity.

"People no longer want to spend hours in crowded traditional kitchen markets and neighbourhood local stores with limited choices," said Faria Yasmin, managing director of Bata Bangladesh and a retail industry analyst. "Consumers now want efficiency, quality, freedom of choice and transparency. Supermarkets are fulfilling those demands."

The transformation is most visible during the evening rush. At the Shwapno Megamall in Moghbazar, aisles are packed with shoppers like Nazmunnahar, a homemaker navigating a trolley filled with everything from fresh produce and protein to high-end cosmetics.

For Nazmunnahar, the shift is about saving time. "A few years ago, I spent hours visiting several grocery stores and wet markets every month," she told The Business Standard. "Now, almost everything I need is available in one place."

"Sometimes I even get better discounts than local stores," she added.

According to industry analysts, the withdrawal of taxes during the interim government's tenure narrowed the price gap between supermarkets and traditional markets, making organised retail more accessible to average consumers.

Moreover, unlike unregulated wet markets, supermarkets offer standardised pricing and perceived quality control. As Dhaka's professional class continues to grow, the "convenience economy" is increasingly becoming a necessity rather than a luxury.

Bata Bangladesh MD Faria further noted the shift was creating opportunities for both established chains and new entrants.

Alongside Shwapno, older brands such as Unimart, Agora and Meena Bazar have resumed expansion after years of slower growth. At the same time, major groups, including PRAN-RFL Group, Akij Group, and Meghna Group of Industries, are aggressively entering the market.

Foreign players, including Alfamart and Mitsubishi Corporation, are also betting on Bangladesh's growing consumer economy.

PRAN-RFL expands retail footprint

Among local conglomerates, PRAN-RFL Group has made one of the strongest moves into organised retail in recent years. The group has built a large retail network through brands including Mithai, Daily Shopping, Regal Emporium, Vision Emporium, Best Buy, Fry Bucket, Duranto Gallery and Tasty Treat.

According to company data, the group now operates 2,444 outlets across its retail brands, attracting more than 160,000 customers daily.

Its retail supermarket chain, Daily Shopping, alone has 107 outlets with more than 23,000 daily visitors, while Regal Emporium serves around 25,000 customers daily through 230 outlets. Vision Emporium has 500 outlets with nearly 35,000 daily visitors. 

Even newer brands are expanding rapidly. Fry Bucket, launched in 2020, now operates 24 outlets and attracts around 4,000 daily customers. Sara's Pizza, launched in 2023, already has six outlets.

Kamruzzaman Kamal, director (marketing) of PRAN-RFL Group, said the company saw strong long-term potential in Bangladesh's changing retail market.

"Consumer behaviour is changing rapidly. People are not only buying products anymore, they are also looking for convenience, experience and trust," he said. "Our goal is to expand organised retail beyond major cities and make modern shopping accessible in district towns and semi-urban areas as well."

Meanwhile, Meena Bazar – the retail supermarket chain owned by Gemcon Group – recorded around 12-15% growth over the past year following the withdrawal of additional VAT on supermarkets, according to its Chief Operating Officer Shameem Ahmed Jaigirder.

He said the company achieved the growth without any major expansion, reflecting what he described as a focus on operational efficiency and customer retention rather than rapid scaling.

"Our motto is quality business, not rapid expansion," he told The Business Standard. He added that Meena Bazar opened four new outlets over the past six months while maintaining service quality and customer trust.

The supermarket chain currently operates 39 outlets nationwide, most of them concentrated in Dhaka.

Akij, Meghna target convenience retail

Akij Group is also preparing for a major expansion through its "Akij Daily" brand, targeting urban consumers seeking affordable and convenient shopping.

Company officials said the venture started in 2022 with five outlets offering food, snacks, beverages and household products. The group is now working to expand the brand into a wider convenience retail network, leveraging Akij's nationwide distribution system and brand recognition.

Executives involved with the expansion said the company wanted to develop a retail model focused on accessibility, affordability and quick shopping for middle-income consumers.

Recently, the group also launched its electronics retail brand "Orca" and announced plans to open at least 25 outlets by 2026 and 100 showrooms nationwide by 2028, signalling broader ambitions in organised retail.

Meghna Group of Industries, however, is taking a different approach by focusing on convenience-based retail.

Under its "Fresh Super Mart" brand, the group plans to establish small-format stores around Dhaka Metro Rail stations to target commuters and densely populated urban areas.

Nine outlets are planned across MRT Line-6 stations, including Motijheel, Bangladesh Secretariat, Dhaka University, Mirpur-10, Mirpur-11, Pallabi and Uttara.

MGI already operates four outlets and plans to expand to 12 stores in the initial phase.

Tanveer Ahmed Mostafa, director of Meghna Group of Industries, said Bangladesh's retail market was approaching an "inflection point". "Urban life is moving faster, families are becoming smaller and metro rail is changing how people spend their time," he said.

"We are not building large destination superstores. We are building neighbourhood convenience stores designed around how city life now works – quick breakfast, coffee and essential shopping on the way home."

He said the model was inspired by convenience retail systems in cities such as Tokyo, Seoul and London, but adapted for Dhaka.

Foreign retailers enter Bangladesh

Earlier this year, Indonesian retail giant Alfamart formed a joint venture with Kazi Farms Group and Mitsubishi Corporation to launch convenience-based retail operations in Bangladesh.

The venture plans to invest $50 million in the first phase and another $70 million later to establish stores, warehouses and modern logistics systems. The first outlets have already started operations in Dhaka, with plans to expand into Chattogram and other major urban centres.

Kazi Zahin Hasan, director of Kazi Farms Group, said Alfamart's advanced inventory management system was one of the key attractions behind the partnership.

"Their system can monitor product sales and stock levels in real time at every outlet. This improves stock management, reduces wastage and increases efficiency," he said.

Industry insiders believe foreign operators could help modernise Bangladesh's retail supply chain through introducing better logistics, technology and data-driven operations.

Industry estimates show the country's FMCG and retail market is now worth more than Tk80,000 crore, growing at an annual rate of 10-12%. Organised retailers, however, still account for only around 4-5% of the total retail market.

Retail experts say this low penetration leaves significant room for growth over the next decade as more consumers shift towards formal retail channels.