According to TBC Research, total assets of selected Georgian FMCG retailers is expected to reach GEL 600mln in 2019. The selected FMCG retailers’ assets grew by 19% y-o-y to GEL 490mln in 2018 and new store openings is expected to further increase total assets by 20% y-o-y in 2019.
Organized FMCG market expansion in Georgia increases average payable days and creates pressure on Current ratio. Current ratio stayed the same (0.5) during 2017-2018 years, lower compared to the organized retailers in different countries.
It could be explained by the fact that the industry is in the growth stage, which is financed partially by the high average payable days, which sustained the same level at 74 in 2018, compared to 2017. High average payable days signals strong bargaining power of Georgian FMCG retailers with suppliers, and is mostly above the same indicator in the neighboring and other peer countries.
High seasonality in December drives average payable days up in the industry by nearly 10-15% higher than in any other given month during the year. Selling efficiency of Georgian FMCG retailers increased in 2018. Inventory days decreased to 36 in 2018, compared to 42 in 2017. This is close to the same indicator in the neighboring and other peer countries.
