Retail expert Miranda Manjgaladze explains that, unlike in Europe, the large number of stores in Georgia does not lead to lower prices because the market is overly fragmented. With nearly 100 retail chains operating, each incurs high operational costs and fails to achieve economies of scale. As a result, competition becomes quantitative rather than efficiency-based, keeping consumer prices elevated.
According to Manjgaladze, European markets such as Germany and Austria operate very differently: 3–4 major players dominate the sector, allowing them to leverage high turnover, negotiate better terms, and maintain lower prices for consumers. In Georgia, however, the market is small, demand is limited, and imported products automatically fall into a “premium” category, making price reduction structurally difficult.
She also notes that distribution costs and so-called “entry fees” within supply chains do not meaningfully affect consumer pricing. Whether these expenses fall on the distributor or the retailer, the cost ultimately remains built into the product. If a dominant party abuses its position, that is for the Competition Agency to investigate; however, past experience shows that most contracts are balanced.
Addressing assumptions that some stores open purely for marketing visibility even when financially unprofitable, Manjgaladze states that such strategies do not exist in retail. Each store opening follows extensive analysis of location, customer flow, and assortment. While not every store perfectly meets its initial forecasts, no retail chain intentionally opens a loss-making outlet.
