- Ethiopia’s retail revolution is underway, fueled by liberalization.
- Carrefour’s entry into Ethiopia strengthens investor confidence in Africa’s second most populous country.
- Consumer spending in Ethiopia is expected to reach $160.5 billion by 2026.
Ethiopia’s retail revolution is expected to take off in 2026 and beyond, stitched together by the fibers of a well-tailored sector development strategy. Carrefour, the French, globally acclaimed franchise, is the latest to enter the Ethiopian retail market, further proof of the sector’s stellar growth.
In January, food retail giant Carrefour announced a franchise and supply partnership with Queens Supermarket PLC, a subsidiary of Midroc Investment Group, to roll out Carrefour banners, expertise and products in Ethiopia.
A report has been announced from Research and Market in an update titled ‘Ethiopia Retail Market Overview, Sales, Market Share and Outlook to 2030’. The report says the ambitious expansion plan will see the first stores rebranded in the first half of 2026.
“We are excited to launch this partnership with a leading retail player in Ethiopia… by 2028, we expect the opening of 17 additional stores. Growing e-commerce distribution channels in Ethiopia are encouraging the entry of new entrants into the market,” the report reads in part.
The recovering economy is driving Ethiopia’s retail revolution
The research analysis shows that Ethiopia’s resurgent economy, coupled with rising local purchasing power due to increased disposable income of the middle class, is cementing Ethiopia’s retail sector into an engine of economic growth.
“On the other hand, growing consumer awareness, increasing competition, costs associated with deploying advanced technologies such as artificial intelligence and emerging non-traditional resellers will challenge market growth,” the report warns.
To overcome these challenges, the report said, retail companies are working to improve their economies of scale, increase operational efficiency and diversify their revenue channels through e-commerce.
Carrefour’s entry into the Ethiopian retail market signals the country’s transition from controlled domestic trade to a more open, competitive consumer market.
Carrefour’s move to set up the first ever supermarket in Ethiopia is a clear demonstration of the growing confidence of investors in Africa, which goes beyond traditional investments in natural resources. This move is expected to, among other things, support the formalization of supply chains and private investment in one of Africa’s fastest growing consumer economies.
Globally, the retail market size is estimated at approximately $4.8 billion, with North America dominating retail sales, followed by Europe and Asia Pacific. Similarly, the Middle East, Latin America and Africa are also growing rapidly and with this comes increasing liberalization of African retail markets.
Also read: Shadows of conflict loom over EACOP as construction nears end
The retail revolution in Ethiopia, an indicator of liberalization in Africa?
“Historically, foreign retailers have faced restrictions due to government policies, limiting market access,” notes Euromonitor International in its review of Carrefour’s entry into Ethiopia. From 2024, Ethiopia has opened its retail and wholesale trade to foreign investors. Last year it issued defined capital and compliance terms that appear to resonate well with investors.
According to Christele Chokossa, a researcher at Euromonitor, the sheer size of Ethiopia, Africa’s second most populous country, makes it an attractive option for retail investment. “As Africa’s second most populous country, with over 135 million inhabitants, it offers strong growth potential in the overall food retail sector,” she reasoned. The researcher also attributes investors’ attraction to Ethiopia’s retail revolution to disinflation.
Notably, inflation in Ethiopia has declined sharply over the past two years, from a peak of 20 percent to a figure of 9.7 percent in December 2025. In economic terms, lower inflation equates to greater real purchasing power for consumers.
According to Euromonitor, Ethiopian consumer spending reached a whopping $134.3 billion in 2025 and is expected to reach $160.5 billion by 2026. “Urbanization, income growth and changing consumption patterns are all key drivers of the expansion potential of modern retail,” the researcher explains.
In her opinion; “The arrival of Carrefour is one of the clearest signals yet that Ethiopia is willing to open its consumer economy to global competition and test whether reforms can translate into modern retail scale.”
Philip Kotler, a marketing guru known as the “father of modern marketing,” explains these sentiments, explaining that “…the power of modern retail lies not just in advertising, but in controlling distribution, pricing and customer experience.” “Carrefour’s entry into Ethiopia brings all three into a market where inefficiency and inconsistency have long driven up prices and limited choice,” the professor notes.
His views are reflected in bestseller ‘Fortune at the Bottom of the Pyramid which states: “…emerging markets are not poor markets, they are underdeveloped markets, full of untapped demand waiting for efficient business models. Carrefour’s franchise partnership with MIDROC reflects the recognition that Ethiopia is ready for this next phase,” the report said.
When Ethiopia began its liberalization drive in April 2024 and imposed a $2.5 million capital threshold for retail entry, it effectively opened its market to global investors. This step is a good example for other African countries. Sando Ojambo, CEO and Executive Director of United Nations Global Compact, attributes Ethiopia’s retail revolution to “the enabling environment created in the country.”
In a recent interview, the CEO said local private sector involvement has been catalyzed by recent liberalization in banking, telecommunications and other sectors. “We have seen the liberalization of a number of things. We have seen it in banking and telecommunications. So it seems like there is a very strong involvement and a good environment for the private sector,” the CEO told the press.
Besides attracting foreign investment, Ojambo said Ethiopia’s liberalization has also promoted the development of small and medium enterprises (SMEs) in the country, boosting overall economic growth. “Creating an enabling environment has played a crucial role for the growth of the private sector,” she continued, saying the economic boom is clearly visible across Addis Ababa.
“I’ve been to Addis a few times. I have to say there’s a lot of growth in the city, obviously booming, from real estate to restaurants and other things. I mean the economy seems to be booming,” she concluded.
Using Ethiopia as an example, the CEO emphasized the importance of collaboration with the African private sector. An economist herself, she said Africa needs to create enabling investment opportunities and mobilize its domestic capital. “The policy must enable Africans to invest more within their own continent,” she emphasizes.
In conclusion, the CEO strongly discouraged what she described as ‘the prevailing risk perception around Africa’. While the misconception often labels Africa as uninvestable, she argued that the reality on the ground tells a very different story, with Ethiopia being a clear example.
#Ethiopias #retail #revolution #Carrefour #expansion