Growth in the hypermarket sector is set to outpace the rest of the grocery retail market in central and Eastern Europe, according to analysts Business Monitor International.

Hypermarkets, which first arrived in the region in the early 1990s, are set to see a wave of growth that outstrips the wider retail sector as a whole.

According to BMI, in 2006, hypermarkets represented just over a third of the mass grocery retail market in the "15 key markets" of central and Eastern Europe, generating around US$39.54bn in sales.

By 2011, the analysts have estimated that hypermarkets will generate sales of $89.2bn, equating to growth of 125%, ahead of the 95% growth forecast for the sector as a whole.

"The hypermarket segment retains considerable potential for further growth in absolute value
terms as well as store numbers and penetration," BMI said.

Economic growth will continue to power the retail sectors across the region, BMI said, but the hypermarket sector will benefit from increasing car ownership and the development of out-of-town retail parks.

BMI said that there will be "variation" between the markets due to differences in regulation, disposable income and land prices. The researchers predict that Russia and Ukraine will be the "drivers of hypermarket development", although growth in those markets could be held back by factors including banking crises and a real estate market crash.

The growth of regional players and the continued threat of government intervention in the sector present risks to multinational retailers, BMI said, although it added: "The biggest challenge moving forward will be competition, rather than political and economic risks, which persist but continue to diminish."