There are 6,000 chain stores across Iran, says an official with Iran Consumer and Producer Protection Organization.
“These multiple retail shops, which operate under one brand name, sell many different types of merchandise, including food, clothing and electronics,” Akbar Taqavi-Shavvazi was also quoted as saying by IRIB News.
“Today, chain stores occupy a very important place in the distribution of retail goods,” he added.
Noting that the density of retail businesses in Iran is very high, the official said, “Iran has over 3.5 million stores affiliated to Iran Chamber of Guilds, half of which are engaged in the distribution of goods. About 2.8 million of businesses in the distribution sector are licensed and 700,000-800,000 are unlicensed. In fact, there is one retail shop per 25 people in Iran.”
Chain stores have a 50% share in the world's retail market, which reaches 80% in advanced economies.
According to the head of Iran's Chain Store Union, Iran's retail market is worth 1,200-1,300 trillion rials ($5-5.5 billion).
Amir Khosro Fakhrian also told the Tejarat-e Farda weekly that chain stores currently have a 10% share or 120 trillion rials ($511 million) in Iran's retail market, which share is projected to reach 25-40% by the end of next Iranian year (March 2021-22).
There are over 2 million licensed and 500,000 unlicensed sales outlets in Iran. This is while the number of grocery stores surpasses 170,000.
The provinces of Tehran, Khorasan Razavi and Isfahan have the highest number of sales outlets in the country.
The Purchasing Managers’ Index for the retail sector was registered at 45.12 in the month ending Dec. 20, 2020, to signal a 26.36% improvement compared with the previous month’s 35.71.
The announcement was made by the Economy and Planning Department of Iran Chamber of Guilds. The department is measuring retail PMI, known by its Farsi acronym Shamekh, since the month ending May 20, 2020.
A reading above 50 indicates expansion in the sector and below 50 indicates contraction. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance. A higher than expected reading should be taken as a positive sign for businesspeople while a lower than expected reading should be taken as negative.
The retail PMI is based on five major survey fields: "new orders", "raw material inventory ", "production", "supplier deliveries" and "employment". The survey includes 12 questions about business conditions and any changes, whether it be improving, no changes or deteriorating.
It is measured through a monthly survey sent to executives of businesses engaged in the retail sector, including grocery stores, supermarkets, cosmetics and toiletries, clothing, bakeries and confectioneries, home appliance, furniture, kitchen and interior design, leather, gold, perfume, cultural products, reception halls, fast food and restaurant, automobile, carpet and textile, electronic devices and mobile phones.
It is based on five major survey areas: "new orders" with a coefficient of 30%, "raw material inventory" (10%), "production" (25%), "supplier deliveries" (15%) and "employment" (20%).
The “activity level” sub-index, which has the highest impact on the overall PMI and whose score equals that of the overall index, stood at 45.12 in the month ending Dec. 20, posting a 26.36% growth compared with 35.71 in the previous month (ended Nov. 20, 2020).
The "new orders" sub-index stood at 43.90 in the month ending Dec. 20, indicating a 53.67% increase compared with the previous month’s reading of 28.57.
The "supplier deliveries" sub-index, which measures how fast deliveries are made, decreased from 55.10 in the month ending Nov. 20 to 50 in the month ending Dec. 20, indicating a 9.26% decline.
The "raw materials inventory" sub-index fell 8.29% from 43.88 in the month ending Nov. 20 to 40.24 in the month leading to Dec. 20.
The "employment" sub-index climbed 59.36% from 30.61 in the eighth month to 48.78 in the ninth Iranian month.
To calculate retail PMI, seven secondary criteria were also surveyed by ICG, including "raw materials or essential products purchase prices", which stood at 83.67 in the month ending Nov. 20. The sub-index decreased by 11.09% to stand at 74.39 in the month ending Dec. 20.
"Warehouse inventory" slid by 17.26% to 43.90 in the ninth Iranian month from 53.06 in the eighth fiscal month.
The "exports" sub-index settled at 43.90 in the month ending Dec. 20 from 33.67 in the month ending Nov. 20, registering a 30.39% increase.
"Prices of products or services" increased by 0.31% to stand at 57.32 in the month ending Dec. 20 from 57.14 in the month ending Nov. 20.
"Fuel consumption" jumped by 10.14% from 52.04 in the eighth Iranian month to 57.32 in the ninth Iranian month.
"Sales" improved by 12.05% from 32.65 in the eighth month to 36.59 in the ninth month.
And, the "performance expectations for the following month" sub-index settled at 56.10 in the month ending Dec. 20 from 38.78 in the month ending Nov. 20, showing a 44.66% growth.
