For conscientious merchants, panic buying is a menace. Generally, there are few things that individual merchants can do to discourage people from hoarding of essential goods. But when fears over the danger of yet another vile regional Middle Eastern war started to run hot in June of 2025, one fairly young and very ambitious Lebanese retail chain decided that it was the right moment to try some anticyclical action.

“After the recent escalations, having seen that people are in a state of fear and might go into panic buying, we decided to send a clear message to all our customers and the retail industry that Tawfeer is here and that we will invest in decreasing prices”, says Rami Bitar, the CEO of both Capital Partners, an internationally active trade group, and supermarket chain Tawfeer. In what according to Bitar was “the complete opposite” of fearful customer expectations, the Lebanese supermarket chain lowered the prices for more than 1,000 items on its shelves as of June 18, while Lebanon’s fears of a new level of armed conflict between Israel and Iran were running very high. Lowering prices and proactively communicating them to consumers would send a strong signal to alter the people’s perceptions of impending political and macroeconomic instability and inflation, hoped Bitar.

As things unfolded over the twelve days of armed exchanges between Israel and Iran, the retail sector problem of over-purchasing was averted later in June, along with many much greater dangers. However, discussing the counterintuitive June 18 pricing measure in context of Tawfeer’s business model and wider expansion strategy suggests that theirs is much more than a one-time tactic of mobilizing customer attention.

Challenging assumptions of what is possible, profitable, and prudent in local retail appears to be the core strategy of the supermarket chain, which, after having opened a 1,000 square meter market as its third store in Saida as of July 10, says that it operates 36 stores across Lebanon under a soft discounter model. This platform, which has in recent years expanded at a faster pace than a few local retail directories have kept up with, ties in with a new central logistics center, a solar power equipped warehouse that can accommodate up to 50,000 pallets of goods.

The warehouse, the construction of which was finalized earlier this year, according to Bitar represents an investment of $23 million. With its storage and distribution capacity that allows for optimization of human resources and streamlining of financials, accounting, and product distribution, is a cornerstone of Tawfeer’s current, and recently upscaled, expansion plan of targeting about 500 outlets – in two categories of discount supermarket and discount neighborhood store – by 2030 and moving from just under 1,000 staff members today to a retail headcount of 3,500.

“We are not comparing ourselves to [high-price supermarkets present in Lebanon] which are catering to A- and B-type consumer categories, nor are we comparing ourselves to [existing] chains that cater to B- and C-type consumers. We provide ourselves as solution for inflation, a solution of smart buying,” Bitar tells Executive. According to him, the discounter concept of Tawfeer is captured in the consumer philosophy of: ‘why pay more when you can get the same quality as in a higher-end market but pay less?’

An internationally successful business model

A soft discounter is positioning itself with a combination of proprietary store brands or value product lines, where it seeks to significantly undercut the prices of competitors and their legacy brands – Bitar says by 15 to 20 percent – and an additional modest selection of branded products that are offered at similar price points as found at competing markets. By number of stock keeping units (SKU, the individual codes that distinguish each item and its price) in its assortment, a soft discounter is situated nearer to a hard discounter – a retailer that carries an even more limited range of basic, store-branded goods – than to a conventional supermarket with ten thousands of SKUs from dozens of brands. The assortment in Tawfeer stores according to Bitar will be limited to 8,000 SKU that cover consumers’ preeminent demands without loss in quality.

Marketers anywhere conventionally and historically like to target customers (A-type consumers) that are affluent and can be attracted to very profitable brands – such as imported store brands that might even be considered budget brands/value lines in their home markets but can be sold at a premium to an import-happy Lebanese consumer. Or they bet on customers (B-type consumers) that mostly base their buying decisions on appearance and habit rather than undertaking sharp price-value calculations or paying much attention to product information.

Habitual bargain hunters as well as people forced by circumstance into various coping strategies, or highly aware, information seeking and data comparing customers are not the types of consumers that marketers for the longest time have been prioritizing. Traditional retailers worked as standalone sellers with strong relationships but weak organization and limited consistence. Only in the last century, the prevalence of traditional retail regressed in developed markets such as European trade of fast-moving consumer goods (FMCG).

While modern retail made forays in Lebanon from the latter part of the 20^th century, modern retail behemoths did not achieve all their proclaimed goals from the early 2000s, such as winning market dominance by way of opening hypermarkets in the 10,000 square meter size range. This notwithstanding, traditional retail has been more sticky than expected by foreign market entrants over the years. Also, as Bitar describes it, affinity to traditional retail is still the rule in the behaviors of Lebanese consumers. Yet in his perspective, the Lebanese retail market with a fragmented load of small, more likely than not inefficient, neighborhood stores (dekkaneh), a smattering of pricey hypermarkets, and provincial/communal chains with affiliations to consumers’ historic loyalties, has become in post-crisis Lebanon overripe for the kind of consumers’ behavior change that drives discount retail successes around the world. 

“Our 2013 decision on the opening of Tawfeer was due to the fact that we are a third-generation family business, which my grandfather established 80 years ago. As we were selling to more than 15 countries in Europe, including Germany, Spain, Austria, in the EU as well as Eastern European countries, we saw the huge rise of discounters in Europe. We saw this all over, whether in high-income countries, or in low-income countries,” Bitar says.

As he experienced it, besides the rise of ecommerce, international growth trends in physical retail have focused in recent years on discounters and neighborhood stores, rather than very large supermarkets with sheer endless isles. Thus, in his opinion, the Lebanese market today is rife for the arrival of the discount store concept that Bitar discusses with a tone of admiration – recalling the story of German discount pioneer ALDI – and has experience with from working for over ten years in the trade and discount retail business in Eastern and Western Europe.

Usual challenges and a “secret sauce”

By Bitar’s estimation, Tawfeer is already the third largest retail chain by its market position early in the second decade of its presence as multi-store operator. Moreover, in terms of annual market share changes, it is the market’s leading disruptor in terms of market positions. The largest annual growth in the retail sector “is coming from Tawfeer, every year now. That is why everybody is watching us and chasing us. We have the financial power and have the determination and are risk takers,” says Bitar.

The chain’s initial 20 stores – rolled out between 2015 and 2021 – had been designed on basis of a single pilot store’s success between 2013 and 2015. After a one-year interruption of adding new stores because of the Covid19 crisis, about 40 percent of the current portfolio – which also includes stores operated under franchise – have been established since January of the first post-pandemic year 2022.  Not only did the company stay the course of applying its business model consistently during the years of social crises and economic pressures, its newly announced goal of 500 stores by 2030 has upped its previous, already ambitious, target by a factor five.

Means used in pursuit of this new target include its own training facility, called Tawfeer Academy; vertical integration of value chains, acquiring for example the group’s own industrial bakery and planning for a slaughterhouse; leveraging of its own importing capacity when making deals with existing wholesalers and importing agents; besides the aforementioned cutting down on overheads by use of a smart, centralized logistics hub that offers several advantages over the conventional picture of multiple delivery trucks with invoice-waving drivers lining up on urban streets next to supermarkets.

Fundamental requirements of and challenges to the operation, on the other hand, exist in form of substantial and hard to reduce operating costs (composed mainly of store rents, utilities, and employee costs) and threefold core concerns: stock management, employee supervision, and customer relations management.

Failures in these three areas – in form of product mismanagement, waste, internal theft, and customer theft – add greatly to the cost base of a retailer. A current study of the German retail environment by a specialized research institute named EHI has for example quantified total losses from these problem at about 1 percent of the retail sector’s turnover in the country. This seemingly small percentage translates into an actual annual damage of 4.95 billion euros, with theft by customers – including organized theft by criminal gangs that even feed stolen products into online retail – amounting to 2.95 billion euros, followed by theft by own employees and employees of suppliers to the tunes of 890 million and 370 million euros. On top of theft in its different forms, stock management problems accounted for about 750 million euros in losses discovered at inventory in 2024. 

Tawfeer, like all retailers, has to contend with economic forces beyond their control (such as inflation) but aspires to reduce the impact of inflation on the consumer. In terms of meeting the future core challenges of the sector, however, it is betting on the all-new miracle technology of artificial intelligence. AI cameras that monitor store shelves, function in conjunction with electronic shelf labels and alert employees to discrepancies for shelving plans, will help optimize stock management at Tawfeer stores in what Bitar calls “a revolution of shelf monitoring”. AI cameras will also be used for employee monitoring and reduction of internal theft. Customer monitoring via AI tools are intended for even wider uses, by creating heatmaps of customer behavior, measuring their facial expressions, and time spent at different shelves.

“All of this will allow us to gather big data, whether from products, from employees, or from clients, and will allow us to customize our ways to better serve clients,” Bitar enthuses. For him, the future of marketing indubitably is “targeted promotions based on AI-generated customer knowledge”. He is, however, cognizant of the risk of being an early adopter of a technology whose flaws have yet to emerge in practical operations and has widened the organization’s time window for expected amortization of investment into AI to double the 18 months recommended by consultants. This is a risk he is willing to take because of huge competitive advantages that he anticipates for retail innovation leaders.

“We have a plan, an aggressive investment plan, for the coming five years. We believe that we will be spending not less than $5 million on AI in the coming five years, and so we are budgeting at least $1 million a year for different software [products] and developments that will make our business easier, quicker, and more efficient,” Bitar says, adding that the improvements expected from AI tools will apply across different departments of the operation, not just in stores.

In the human development aspect of the expansion plan, he on the other hand emphasizes the role of partnerships with small and micro retail players. In a belief that the Lebanese market has plentiful room for the concept of a neighborhood store of 200 to 300 square meters, Bitar wants to see hundreds of current dekkaneh operators become franchise partners that adhere to the same price policy as a Tawfeer discount supermarket. 

“The traditional dekkaneh operators do not have a future. We want to integrate them to become part of Tawfeer. We need them, and they will need us because of changes in the market,” he says, adding that these franchisees would remain owner-operators of their stores but become better equipped to face challenges from competitors.  This concept, branded as Tawfeer Express, according to Bitar will carry a message for every small, traditional operator: “I don’t want to see you go out of business, so let’s partner.” 

In an economy that is based less on scarcity and more on need for fair distribution, panic buying is an anachronistic and mysterious but very real occurrence. The associated phenomena of sudden but needless shortages and price gouging for essential goods can become very dangerous, especially for those of us who have to count every penny twice when going to the neighborhood store, grocer, or gas station. But nonetheless, in times of impending catastrophes (both natural catastrophes and man-made ones, or the deep worry over either), narrow social strata of the somewhat affluent and easily fearful descend into archetypical hoarding, putting over-purchasing pressure on modern supply chains.

For conscientious merchants, panic buying is a menace. Generally, there are few things that individual merchants can do to discourage people from hoarding of essential goods. But when fears over the danger of yet another vile regional Middle Eastern war started to run hot in June of 2025, one fairly young and very ambitious Lebanese retail chain decided that it was the right moment to try some anticyclical action.

“After the recent escalations, having seen that people are in a state of fear and might go into panic buying, we decided to send a clear message to all our customers and the retail industry that Tawfeer is here and that we will invest in decreasing prices”, says Rami Bitar, the CEO of both Capital Partners, an internationally active trade group, and supermarket chain Tawfeer. In what according to Bitar was “the complete opposite” of fearful customer expectations, the Lebanese supermarket chain lowered the prices for more than 1,000 items on its shelves as of June 18, while Lebanon’s fears of a new level of armed conflict between Israel and Iran were running very high. Lowering prices and proactively communicating them to consumers would send a strong signal to alter the people’s perceptions of impending political and macroeconomic instability and inflation, hoped Bitar.

As things unfolded over the twelve days of armed exchanges between Israel and Iran, the retail sector problem of over-purchasing was averted later in June, along with many much greater dangers. However, discussing the counterintuitive June 18 pricing measure in context of Tawfeer’s business model and wider expansion strategy suggests that theirs is much more than a one-time tactic of mobilizing customer attention.

Challenging assumptions of what is possible, profitable, and prudent in local retail appears to be the core strategy of the supermarket chain, which, after having opened a 1,000 square meter market as its third store in Saida as of July 10, says that it operates 36 stores across Lebanon under a soft discounter model. This platform, which has in recent years expanded at a faster pace than a few local retail directories have kept up with, ties in with a new central logistics center, a solar power equipped warehouse that can accommodate up to 50,000 pallets of goods.

The warehouse, the construction of which was finalized earlier this year, according to Bitar represents an investment of $23 million. With its storage and distribution capacity that allows for optimization of human resources and streamlining of financials, accounting, and product distribution, is a cornerstone of Tawfeer’s current, and recently upscaled, expansion plan of targeting about 500 outlets – in two categories of discount supermarket and discount neighborhood store – by 2030 and moving from just under 1,000 staff members today to a retail headcount of 3,500.

“We are not comparing ourselves to [high-price supermarkets present in Lebanon] which are catering to A- and B-type consumer categories, nor are we comparing ourselves to [existing] chains that cater to B- and C-type consumers. We provide ourselves as solution for inflation, a solution of smart buying,” Bitar tells Executive. According to him, the discounter concept of Tawfeer is captured in the consumer philosophy of: ‘why pay more when you can get the same quality as in a higher-end market but pay less?’

An internationally successful business model

A soft discounter is positioning itself with a combination of proprietary store brands or value product lines, where it seeks to significantly undercut the prices of competitors and their legacy brands – Bitar says by 15 to 20 percent – and an additional modest selection of branded products that are offered at similar price points as found at competing markets. By number of stock keeping units (SKU, the individual codes that distinguish each item and its price) in its assortment, a soft discounter is situated nearer to a hard discounter – a retailer that carries an even more limited range of basic, store-branded goods – than to a conventional supermarket with ten thousands of SKUs from dozens of brands. The assortment in Tawfeer stores according to Bitar will be limited to 8,000 SKU that cover consumers’ preeminent demands without loss in quality.

Marketers anywhere conventionally and historically like to target customers (A-type consumers) that are affluent and can be attracted to very profitable brands – such as imported store brands that might even be considered budget brands/value lines in their home markets but can be sold at a premium to an import-happy Lebanese consumer. Or they bet on customers (B-type consumers) that mostly base their buying decisions on appearance and habit rather than undertaking sharp price-value calculations or paying much attention to product information.

Habitual bargain hunters as well as people forced by circumstance into various coping strategies, or highly aware, information seeking and data comparing customers are not the types of consumers that marketers for the longest time have been prioritizing. Traditional retailers worked as standalone sellers with strong relationships but weak organization and limited consistence. Only in the last century, the prevalence of traditional retail regressed in developed markets such as European trade of fast-moving consumer goods (FMCG).

While modern retail made forays in Lebanon from the latter part of the 20^th century, modern retail behemoths did not achieve all their proclaimed goals from the early 2000s, such as winning market dominance by way of opening hypermarkets in the 10,000 square meter size range. This notwithstanding, traditional retail has been more sticky than expected by foreign market entrants over the years. Also, as Bitar describes it, affinity to traditional retail is still the rule in the behaviors of Lebanese consumers. Yet in his perspective, the Lebanese retail market with a fragmented load of small, more likely than not inefficient, neighborhood stores (dekkaneh), a smattering of pricey hypermarkets, and provincial/communal chains with affiliations to consumers’ historic loyalties, has become in post-crisis Lebanon overripe for the kind of consumers’ behavior change that drives discount retail successes around the world. 

“Our 2013 decision on the opening of Tawfeer was due to the fact that we are a third-generation family business, which my grandfather established 80 years ago. As we were selling to more than 15 countries in Europe, including Germany, Spain, Austria, in the EU as well as Eastern European countries, we saw the huge rise of discounters in Europe. We saw this all over, whether in high-income countries, or in low-income countries,” Bitar says.

As he experienced it, besides the rise of ecommerce, international growth trends in physical retail have focused in recent years on discounters and neighborhood stores, rather than very large supermarkets with sheer endless isles. Thus, in his opinion, the Lebanese market today is rife for the arrival of the discount store concept that Bitar discusses with a tone of admiration – recalling the story of German discount pioneer ALDI – and has experience with from working for over ten years in the trade and discount retail business in Eastern and Western Europe.

Usual challenges and a “secret sauce”

By Bitar’s estimation, Tawfeer is already the third largest retail chain by its market position early in the second decade of its presence as multi-store operator. Moreover, in terms of annual market share changes, it is the market’s leading disruptor in terms of market positions. The largest annual growth in the retail sector “is coming from Tawfeer, every year now. That is why everybody is watching us and chasing us. We have the financial power and have the determination and are risk takers,” says Bitar.

The chain’s initial 20 stores – rolled out between 2015 and 2021 – had been designed on basis of a single pilot store’s success between 2013 and 2015. After a one-year interruption of adding new stores because of the Covid19 crisis, about 40 percent of the current portfolio – which also includes stores operated under franchise – have been established since January of the first post-pandemic year 2022.  Not only did the company stay the course of applying its business model consistently during the years of social crises and economic pressures, its newly announced goal of 500 stores by 2030 has upped its previous, already ambitious, target by a factor five.

Means used in pursuit of this new target include its own training facility, called Tawfeer Academy; vertical integration of value chains, acquiring for example the group’s own industrial bakery and planning for a slaughterhouse; leveraging of its own importing capacity when making deals with existing wholesalers and importing agents; besides the aforementioned cutting down on overheads by use of a smart, centralized logistics hub that offers several advantages over the conventional picture of multiple delivery trucks with invoice-waving drivers lining up on urban streets next to supermarkets.

Fundamental requirements of and challenges to the operation, on the other hand, exist in form of substantial and hard to reduce operating costs (composed mainly of store rents, utilities, and employee costs) and threefold core concerns: stock management, employee supervision, and customer relations management.

Failures in these three areas – in form of product mismanagement, waste, internal theft, and customer theft – add greatly to the cost base of a retailer. A current study of the German retail environment by a specialized research institute named EHI has for example quantified total losses from these problem at about 1 percent of the retail sector’s turnover in the country. This seemingly small percentage translates into an actual annual damage of 4.95 billion euros, with theft by customers – including organized theft by criminal gangs that even feed stolen products into online retail – amounting to 2.95 billion euros, followed by theft by own employees and employees of suppliers to the tunes of 890 million and 370 million euros. On top of theft in its different forms, stock management problems accounted for about 750 million euros in losses discovered at inventory in 2024. 

Tawfeer, like all retailers, has to contend with economic forces beyond their control (such as inflation) but aspires to reduce the impact of inflation on the consumer. In terms of meeting the future core challenges of the sector, however, it is betting on the all-new miracle technology of artificial intelligence. AI cameras that monitor store shelves, function in conjunction with electronic shelf labels and alert employees to discrepancies for shelving plans, will help optimize stock management at Tawfeer stores in what Bitar calls “a revolution of shelf monitoring”. AI cameras will also be used for employee monitoring and reduction of internal theft. Customer monitoring via AI tools are intended for even wider uses, by creating heatmaps of customer behavior, measuring their facial expressions, and time spent at different shelves.

“All of this will allow us to gather big data, whether from products, from employees, or from clients, and will allow us to customize our ways to better serve clients,” Bitar enthuses. For him, the future of marketing indubitably is “targeted promotions based on AI-generated customer knowledge”. He is, however, cognizant of the risk of being an early adopter of a technology whose flaws have yet to emerge in practical operations and has widened the organization’s time window for expected amortization of investment into AI to double the 18 months recommended by consultants. This is a risk he is willing to take because of huge competitive advantages that he anticipates for retail innovation leaders.

“We have a plan, an aggressive investment plan, for the coming five years. We believe that we will be spending not less than $5 million on AI in the coming five years, and so we are budgeting at least $1 million a year for different software [products] and developments that will make our business easier, quicker, and more efficient,” Bitar says, adding that the improvements expected from AI tools will apply across different departments of the operation, not just in stores.

In the human development aspect of the expansion plan, he on the other hand emphasizes the role of partnerships with small and micro retail players. In a belief that the Lebanese market has plentiful room for the concept of a neighborhood store of 200 to 300 square meters, Bitar wants to see hundreds of current dekkaneh operators become franchise partners that adhere to the same price policy as a Tawfeer discount supermarket. 

“The traditional dekkaneh operators do not have a future. We want to integrate them to become part of Tawfeer. We need them, and they will need us because of changes in the market,” he says, adding that these franchisees would remain owner-operators of their stores but become better equipped to face challenges from competitors.  This concept, branded as Tawfeer Express, according to Bitar will carry a message for every small, traditional operator: “I don’t want to see you go out of business, so let’s partner.” 

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