Rumours are rife that Sainsbury’s operations in Egypt, including 17 supermarkets, will be bought out by local investors, sending the UK supermarket group home less than one year after it arrived. For the time being, however, officials from the retailer are maintaining, “all options are still being considered.”
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Sainsbury entered the country after acquiring an 80% stake in the of Egyptian Distribution Group (Edge), but at the end of November the company revealed that a £10.2m operating loss recorded for the April-October period was forcing a re-evaluation of continued financial exposure to the area. Sales have suffered badly under a Palestinian intifada, and despite some success it has struggled under stiff competition from rival retailers.
Prime Minister Atef Obeid is anxious to maintain Sainsbury’s presence, however, concerned that the image of Egypt could suffer as a destination for foreign investment. On 22 December, he issued a statement to stress that Sainsbury’s decisions were not related to the Egyptian investment climate and last Tuesday (2 January) he met with UK ambassador Graham Boyce to discuss the situation.
