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EghtesadOnline: Iranian chain stores are slowly taking a bigger role in the retailing of goods across the country.

Five years ago, chain stores had a 3% share in the retailing of goods in Iran, but last year (March 2016-17), this share rose to about 7%, Alireza Parvaneh, the manager of Food and Drinks Department of Refah Chain Stores Company, told Financial Tribune.

According to Parvaneh, in advanced countries, chain stores have a share of around 70% in retailing, suggesting that Iranians continue to favor traditional outlets, although the pattern is shifting.

“The share [of chain stores in Iran’s retailing] is continuing to grow exponentially,” Financial Tribune quoted him as saying.

Noting that the Iranian public is increasingly finding shopping at chain stores more convenient, he said people are growing more and more aware that goods, prices and services enjoy better supervision and control in chain stores.

Iranian chain stores generally offer their goods at prices lower than what is printed on packages for attracting more customers and having higher sales. On average, goods in Iranian chain stores can be purchased 15% cheaper compared to prices printed on packages, as these stores directly receive products from producers and offer them to end consumers without any middlemen.

According to Amir Khosro Fakhrian, the head of National Union of Chain Stores, some 25,000 people are currently employed in 2,500 chain stores in Iran.

Refah Chain Stores Company has 230 branches spread across all provinces, which employ some 3,000 people. Its nominal capital is estimated to be 10 trillion rials ($266.098 million).

The chain store has recently offered 52% of its shares worth 3.8 trillion rials (about $102 million) belonging to four major banks to investors in the domestic stock market.

According to Parvaneh, Refah plans to increase the number of its stores to 500 by the fiscal 2021-22.

Last year, Refah signed a memorandum of understanding on electronic trade and joint investments in hypermarkets and small chain stores with South Korea’s largest retailer Emart.

According to Refah’s CEO Farshid Golzadeh Kermani, the goal is to begin the production of South Korean products in Iran with a focus on technology transfer and quality improvement.

The National Union of Chain Stores was founded in the last Iranian year (ended March 20, 2017) as more companies are exploring ways and means of building big shopping centers. The union is in charge of issuing and extending licenses for chain stores besides supervising their activities.

According to deputy minister of industries, mining and trade, Mojtaba Khosrotaj, close to 1.8 million retail outlets are operating in Iran, which constitute one for every 44 Iranians, “which is not enough”.

Iran retailing Iran Chain Stores