Korean retailer seals deal to set up shop in Iran

Press TV- A South Korean company has sealed a deal to open convenience stores in Iran, putting further pressure on local businesses which are already feeling the heat from big retailers in neighboring countries and beyond.

BGF Retail Co which owns South Korea’s largest convenience store chain, CU, has entrusted Iranian home appliances firm Entekhab Investment Development Group with taking charge of investment and operation of CU outlets in Iran.

The deal marks CU’s first foray abroad, coming in the wake of hypermarkets and mass merchandisers from Turkey, the UAE, and Europe seeking to capitalize on a pent-up demand in the Iranian market following years of sanctions.

The inroads have left small businesses in Iran squeezed out and some of them have already started grassroots campaigns to protect their local businesses.

Iranian and South Korean retailers pose fore pictures after signing a deal in Tehran.

In February, Turkish discount retailer BIM said it was exploring opportunities in Iran for possible opening of stores in a country which has largely remained closed off for years under sanctions.

Qatar’s Abu Issa Holding, one of the largest retail and luxury goods firms in the Middle East, has said it expects to open its first store in Tehran in the second quarter of 2017. The retailer is among a subset of Persian Gulf Arab businesses which hope to set up shop in Iran.

MAF-owned hypermarket operator Hyper Star, a subsidiary of French multinational retailer Carrefour, and discount chain stores operator Canbo have already established a niche in Tehran’s grocery market. Some others are dusting down their Iran file and have put the country on the menu.

Local retailers say foreign inroads have harmed many supermarket owners and food distributors in Tehran and other major cities.

According to secretary of food wholesalers union Ali Karbasi, 30% of wholesalers in one market neighborhood in downtown Tehran have shut down and more businesses are likely to go to the wall with the opening of new foreign shops.