The distribution network in Cyprus

Evolution of the Sector

The retail sector is one of the most important clusters of the Cypriot economy, representing 27.4% of Cyprus’s GDP. While the retail market in Cyprus was growing slowly but surely over the years, this incremental growth was sharply halted when the economy of Cyprus found itself in a recession in 2009. Actually, the Cypriot retail market’s shrinking was partly the result of the economic crisis in Greece and the significant economic ties that Cyprus has with Greece. The Cypriot retail sector has also experienced a decline due to the Cypriot bailout agreement which led to the ‘haircut’ on bank savings in March of 2013. All clusters of the retail sector were affected: the retail of textiles and clothing experienced a decrease of 6.4%; the retail of electrical goods a 15% decrease; the retail of computer equipment and books a decrease of 6.3%. The fashion retail sector has also experienced dramatic consequences.

Most imported products and services are handled through agents and distributors. While most agent agreements may not be exclusive, most distributor agreements are. In some cases, a distributor may obtain an agreement to represent a company in both Cyprus and Greece and sometimes in countries of Eastern Europe as well. There are several major local and European supermarket chains and a few department stores. Most companies in Cyprus are relatively small, family-owned and operated firms, although there are some notable exceptions. Big companies representing several brands have their own distribution centers based out of industrial areas of the major cities. All products to Cyprus are shipped through Limassol port, which is operated by the Cyprus Ports Authority.

Market share

According to one of the main Cypriot retailers, there are nearly 3,000 distribution points (ranging from grocery stores to hypermarkets) in Cyprus. Two types of distribution channels are booming in Cyprus:

chain stores like Metro or Marks & Spencers.
franchises, which have been very successful in recent years. Large American fast-food chains, international car rental companies, major clothing brands have established a presence in Cyprus through franchising. The same goes for mass retailers, especially the Carrefour Group.

The main players in the retail sector in Cyprus are AlphaMega, E&S, Metro, Kkolias and Lidl.

Retail Sector Organisations

Cyprus International Businesses Association
Cyprus Chamber of Commerce and Industry
Cyprus Employers and Industrialists Federation
Cyprus Ministry of Finance

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