There is a supermarket for every kind of consumer in Karachi. Stores like Springs cater to the elite and chains like Imtiaz to families purchasing on a budget. Every income segment and taste will find a local or international chain to cater to their needs in the metropolitan centres. Urbanisation is now carrying this trend onwards to the smaller cities.

“Second-tier cities are important because their consumers are connected to the big cities,” says Jahanzeb Saeed, Director, Consumer Division, Muller & Phipps Pakistan. “They have experienced modern trade in the big cities and have come to expect a similar experience from their hometown.” 

As it turns out, distribution to cities other than Karachi, Lahore and Islamabad (KLI) is relatively easier in the sense that modern trade competition is less intense. The promotional offer that customers see on, say Imtiaz’s shelf in Karachi, is based on a bulk order placed with the distributor in exchange for a lower price. However, as there are fewer big players in smaller markets, there is less pressure on the distributor to offer better discounts. Nevertheless, this may be changing as supermarket chains venture out of KLI. International modern trade such as Metro Cash and Carry are present in cities other than the main urban centres, along with Imtiaz and Al-Fatah – and are influencing the consumer profiles of these supermarkets. 

“Previously, in smaller cities, the bulk of the grocery shopping was done by men. Women would shop for clothes but limit themselves to a quick stop at general stores. Modern trade has changed this. Now, women can be seen pushing trolleys filled with household items,” explains Saeed. 

In this sense, large supermarket chains have introduced an element of female empowerment by normalising shopping for people who will actually be using the bulk of the purchases. It allows a previously male-dominant activity to make space for women, paving the road for female employment in large supermarkets similar to the converters that work in hypermarkets such as Carrefour in Karachi. 

With more women doing grocery shopping, the stock keeping units offer change as well, as women tend to buy economy packs compared to men. “Women are more likely to calculate the per-unit price of diapers, for example,” says Saeed. Previously, small packs or even open diapers were sold one at a time. While this is still continuing, large economy packs are available in supermarkets that offer higher per-piece discounts. Although supermarkets in second-tier cities are catching up with KLI, the consumer turnover is not as high. As a result, not all big brands are available due to supply chain challenges. “Consumer brands that require a controlled environment are less likely to be available, such as Happy Cow Cheese,” says Saeed. 

While there may be citizens with sufficient buying power to purchase the pricier consumer goods, the number is not high enough for brands to invest in sufficient infrastructure, although e-commerce is helping solve this problem to some extent. However, some things are consumed in the city of origin regardless of e-commerce; for example, one cannot order Baskin-Robbins ice cream in Multan.

Other than the established chains, each city has its own dynamics and culture which impacts consumer expectations and the selection of goods offered. Take Abbottabad in Punjab for example, which is a surprisingly metropolitan city. Major clothing brands such as Zubaida’s and Outfitters dot its roads and although major supermarket chains have not yet opened there, the city has its own Gelani Mart – a mini-Imtiaz of sorts.  Gelani Mart offers most of the identifiable brand names found on the racks of any major supermarket in Karachi. Spread over several aisles, apparel such as undergarments, a spread of make-up items, towels, pet accessories and tampons can be found on the shelves. “We offer lower rates than anywhere else in Abbottabad,” boasts the cashier as he bags-up Korneez’s toffee and barbeque popcorn, snack items not commonly available in Karachi. 

In contrast, Gwadar’s dynamics are very different. The shops are more like general stores than supermarkets and they offer nearly as many Iranian goods as they do brand names commonly found in KLI. From chocolates that resemble Kit Kat to litre bottles of lassi, most snack food items have an Iranian counterpart available. Given the level of Iranian integration in Balochistan and the proximity to the border, people there expect to find an array of smuggled products when they walk into a store.

The lack of internet connectivity across Balochistan makes the digitisation of supermarkets impossible in the near or even medium term. As Gwadar’s population density and geographic spread is a little more than a couple of phases of Karachi’s Defence area, most customers are local to the area or tourists looking for Iranian products to take home as gifts. Euromonitor’s 2021 report on Pakistan’s retailing sector predicts rising urbanisation, a young population and growing participation of women in the workforce as drivers for sales growth. While this trend can be witnessed in KLI, second-tier cities are in the process of catching up.

Fatima S. Attarwala is an analyst at Dawn’s Business & Finance. attarwala@gmail.com