Growth outlook positive for Georgia’s fast moving consumer goods market

Georgia’s expanding fast moving consumer goods (FMCG) retail market is poised for growth in 2025.

TBC Capital’s latest report on Georgia’s FMCG market points to strong signs for continued growth in 2025 as well as strong expansion for the country’s organized (brand) retail market chains.

The study, which looked at trends in the sector over the first nine months of the year, points to healthy indicators that growth in the overall FMCG market has stabilized, although the organized market is positioned for stronger expansion at the expense of the unorganized market—bazars and non-branded retail stores.

“We still believe that in 2024 and 2025, for the overall FMCG market, including the organized and the unorganized markets, the growth rate will be normalized,” notes TBC Capital Senior Associate Andro Tvaliashvili. He added that the expectation is for the sector to be in line with pre-pandemic 2019 growth numbers—around 4 percent—if there are no unexpected shocks to the overall economy.

“In 2025, we also believe that the organized market will continue to grow at a higher pace compared to the overall market,” he explains.

“This will translate into an increased share for the organized market at 41 percent in the current year and reaching 45 percent in 2025.”

The report’s findings highlight the organized market’s strong performance through higher “like for like” (LFL) sales despite near zero inflation on FMCG goods.

“Looking at the two major drivers for the growth in the organized market, we can look at the difference between the inflation on FMCG products and the growth rate of wages. We see a huge gap between them, which means that the additional funds that the population has to spend…still translates into increased expenditure on FMCG products,” Tvaliashvili says.

“Western European countries, for example, are at a level where any additional income goes to other goods, such as trave-ling, leisure, saving. In Georgia, if we look at the average, the population still has to satisfy their need of the primary needs of FMCG and therefore this additional income part of it goes to FMCG.”

The recent move by the Daily Group to add the Magniti retail supermarket chain to its expanded holdings (Spar, Ioli, Daily, and Gvirila) is another sign the organized side of the sector is developing and primed for growth and more consolidations, he notes.

The consolidation will give the Daily Group an estimated 31 percent of the organized FCMG market. That shakes up the local configuration but largely matches the FMCG sector development seen in Eastern Europe as well as developed econ-omies like Western Europe and the US, Tvaliashvili says.

The make-up of the expanded Daily Group reflects the organized market’s own growth into the regions outside of capital Tbilisi. The retail brands within the group represent different niches in Georgia’s highly competitive FMCG sector: some, like Spar, have a strong urban presence while others, like Daily, are more focused on regional communities outside of Tbilisi.

The data on new store openings also shows growth in the capital was lower in 2024 compared to growth in western and eastern Georgia: just 10 percent more stores opened in Tbilisi in the first nine months of the year, compared to a 31 percent jump in western Georgia and a 21 percent increase in eastern Georgia.

Moving forward, Tvaliashvili says market players will continue to look for opportunities outside Tbilisi.

“Look at the level of organized market share in the capital. It is close to 60 percent, which is really similar to Western Europe-an numbers,” he says. “So we see that Tbilisi is really well penetrated by the organized market. This doesn’t mean that there is no room for growth—we still see there are still bazaars in the capital…but the potential remains higher in the regions.”