Pre-2000: Informal Retail Dominance
Before the turn of the millennium, Ghana’s retail sector was overwhelmingly informal, dominated by open-air markets, roadside vendors, and family-run kiosks, which formed the heart of commerce.
While these outlets provided affordable and accessible products to a broad segment of the population, they operated with limited structure, relying on cash-based transactions, unregulated pricing, and fragmented supply chains.
The absence of cold-chain logistics and an electronic inventory system constrained product variety, with >80% of Fast Moving Consumer Goods(FMCG) sales in open-air markets (GSS,1998).
Formal retail was sparse, with early attempts the Kingsway Stores (Ghana’s first department store) and the United African Company (UCA), launched in 1929.
Ghana National Trading Corporation (GNTC) and later entrants such as A.G. Leventis struggled to achieve scale.
Ventures by Patterson Zochonist (PZ) in the ‘70s and A-Life (in Accra, Kumasi, Takoradi) emerged in the ‘90s, offering air-conditioned environments and a curated product range.
However, these ventures were short-lived, and the likes of A-Life chain collapsing, underscoring the difficulties faced by indigenous formal retailers at the time.
Despite pockets of formality, over 95% of retail activity in Ghana remained informal as late as 2015, according to Brookings Institution analysis.
Traditional markets like Makola, Malata, Kotokuraba, and Kejetia continued to thrive, providing a mix of local produce, imported goods, and household items.
They catered especially to lower-income households through price haggling, plus the ability to purchase goods in small, daily quantities and also on credit terms (based on familiarity).
Post-2000: The Rise of Modern Trade and Hypermarkets
By 2000, Ghana’s retail sector was at a critical inflexion point; an underdeveloped formal trade space set against a rapidly urbanising and aspirational population, ushering in significant transformation.
A confluence of market forces and shifting consumer expectations catalysed the emergence of organised retail.
As consumers become more knowledgeable and want more, Ghana’s retail business has evolved into one of the country’s most dynamic and fast-paced. “Urbanization accelerated from 43.8% (2000) to 56.7% (2020) (GSS, 2021), directly correlating with a 23% rise in supermarket patronage (Nielsen, 2019).”
The key strategies adopted by the prominent players in the Ghana retail industry include new experiential-oriented facility expansions and convenience-minded investments to cater to the growing consumer demand for FMCG – general goods and services.
Multinational consumer goods companies such as Unilever, PZ Cussons, Danone – Fan Milk, and others increased investments and expanded their presence through local production and distribution.
New brands and franchisees (KFC, Burger King, Pinkberry, Pizza Hut, Domino’s, Pizza Man, etc.) with multiple locations started popping up.
These moves improved product variety, availability, and consistency, plus cost competitiveness. Compelling modern retailers to stock a wider, more consistent range of goods, an essential requirement for larger-format organized retail trends.
Organised retail, encompassing supermarkets, hypermarkets, shopping malls, and later e-commerce platforms, began to flourish.
South African chains like Shoprite entered Ghana, while local giants like Melcom rapidly expanded their footprint. Melcom, founded in 1989, became the country’s largest formal retailer by the early 2010s, with nationwide locations.
The introduction of Melcom Mini, a new convenience format and homegrown and international brands It’s e-commerce platform is currently ranked among the top three in Ghana, with +200,000 monthly active customers.
Other brands such as Maxmart, Koala, and Game entered to serve niche or upscale markets.
Crucially, this shift was not solely driven by retailers; it was a response to changing consumer habits, shaped by rising urbanisation, exposure to global trends, amid the growth of Ghana’s middle class.
Drivers of Modern Retail Growth
1. Urbanisation and Middle-Class Expansion
Between 2000 and 2020, Ghana’s urban population grew from 44% to nearly 58%. Cities like Accra, Kumasi, Takoradi, and Tamale experienced rapid population and infrastructure growth.
“Urbanization accelerated from 43.8% (2000) to 56.7% (2020) (GSS, 2021), directly correlating with a 23% rise in supermarket patronage (Nielsen, 2019).” With this came demand for accessible, secure, and structured shopping experiences.
A growing middle class, bolstered by higher incomes, returnees, education, and diaspora influence, seeks convenience, brand assurance, and quality offerings by formal retail outlets.
2. Foreign and Local Investment
Ghana’s stable business environment, political stability, and strategic location in West Africa attracted both domestic and foreign investors. “Ghana’s formal retail sector grew at a Compound Annual Growth Rate(CAGR) of 8.3% (2010–2020), driven by Foreign Direct Investment (FDI) inflows totaling $1.2B in retail infrastructure (UNCTAD, 2021).”
As per DMI analysis, the Ghana retail industry was about US$32 billion in 2023 and is expected to reach about US$54 billion in 2031, growing at a CAGR of about 7.5% during the forecasting period (2024-2031).
3. Improved Supply Chains
The development of robust supply chains, from warehousing to logistics, inclusive of Cold-Chain additions, enables supermarkets and hypermarkets to ensure consistency of stock, freshness of perishable goods, and a more predictable customer experience.
Manufacturers and Retailers are reshaping distribution with FMCG giants like Unilever Ghana, Melcom, Nestle Ghana, and others vertically integrating by establishing dedicated distribution hubs, reducing reliance on third-party wholesalers. Electroland, Kasapreko, Lesfam, etc., have also increased local investment in different channels.
Notable distribution partners like Kwatsons, Forewin, Distro, Lesfam, Berhill, Matcom, etc., are expanding with the development of roads and highways, combined with the implementation of the Rural Telephony and Digital Inclusion initiative, and ensuring greater market access outside of urban regions.
4. Urban Produce Farmers
Local produce farmers within and accessible to the urban region are growing adherence to global fresh standards, and the spring up of farmers’ markets in urban areas has also deepened the grocery offering, lessening the reliance on imports within (South Africa/Egypt), outside the continent(Europe).
These back-end efficiencies allowed retailers to compete more effectively with informal traders.
Shopping Malls: A New Retail Experience
Ghana’s first full-scale mall, Accra Mall, opened in 2008, signaling a new era of consumer experience. With 22,900 m² of retail space, it combined fashion, groceries, electronics, dining, and cinema in a single destination.
Its immediate success paved the way for more retail and experiential-oriented developments.
Between 2013 and 2019, several reputable malls launched: Marina Mall (Accra), West Hills Mall (27,000 m²), Achimota Retail Centre, Junction Mall, and Kumasi City Mall (the first major mall outside Accra).
These shopping centres, developed largely through private-public partnerships and commercial real estate investment, dramatically redefined urban retail culture.
By 2020, Ghana had approximately 138,000 m² of formal retail space, with additional standalone formats and more developments in the pipeline.
Despite this, demand often outstripped supply, particularly in Accra, where prime retail rents reached $40–$60 per m², creating a high fixed cost for tenants and with an elevated rate of business turnover, especially in recent years.
Retail development continues apace, with the Takoradi Mall opening its doors in 2018, Garden City Mall in Kumasi nears completion, while the ambitious Ghana International Mall (also called “World Mall”) on Spintex Road (the main area of commerce) in Accra promises to be among the largest in West Africa.
The Hybrid Marketplace: Formal Meets Informal
Despite the rise of organised retail, Ghana’s retail market remains fragmented. According to the USDA (2024), informal markets and small grocers still account for approximately 83% of food retail, while supermarkets and convenience stores make up only 17%.
This coexistence underscores the adaptability of Ghanaian consumers. Many shop across formats, purchasing packaged goods at supermarkets while sourcing fresh produce and staples from open-air markets.
The latter often offer lower prices, flexibility in quantity, and strong personal relationships with sellers.
Even within the formal sector, market segmentation is clear. Melcom is well-diversified into other hospitality businesses, whilst still dominating with its broad, mid-market appeal. Shoprite anchors most malls but maintains fewer outlets.
Palace Hypermarkets cater to bulk and value-conscious shoppers, while Koala and Max-mart attract upper-middle-class consumers.
Meanwhile, the “China Malls,” which feature large, warehouse-style outlets operated by Chinese merchants offering a vast range of low-cost goods, from electronics to groceries, have grown in popularity.
The result is a uniquely Ghanaian hybrid: a dynamic, multi-format ecosystem shaped by price sensitivity, convenience, and social norms.
Consumers as Catalysts: The Digital Influence
Consumer behaviour, particularly among younger generations, is rapidly transforming modern retail.
1. Convenience and Time Efficiency
Busy urban lifestyles have made one-stop shopping increasingly attractive. Supermarkets offer clean, air-conditioned environments, clear pricing, and extended operating hours. For many, this outweighs the hustle of traditional open-air markets.
2. Digital Adoption and E-Commerce
Internet penetration from 0.2% in 2000 reached +62.5% by 2020(Statista), and smartphone usage mirrored this growth. Platforms like Jumia, Zoobashop, Hubtel, Melcomonline, and Tonaton have established Ghana’s e-commerce footprint, driven by mobile-first strategies. Jumia, in particular, has emerged as a top-three national retailer by sales due to being one of the 1st. Movers into this space – a remarkable feat considering its online-only model.
3. Cashless Payments and Fintech
Digital transformation driven by Mobile money portability has revolutionized retail transactions. Platforms like MTN Mobile Money, Vodafone Cash, Slide Pay, and Zee Pay etc. have enabled even the unbanked population to engage in digital commerce.
By 2017, 67.5% of adults had already adopted digital payment channels—a number that has steadily climbed, reflecting the adoption of cashless solutions.
Supermarkets and other retail channels have responded with POS systems, QR payments, and WhatsApp ordering in the advent of COVID-19, accelerated digitisation across the board, and as such, stakeholders have had to respond with local organic and internationally imported delivery solutions to support this precipitous expansion.
4. On-Demand and Last-Mile Logistics
Startups and delivery services like Glovo, Hubtel, ShaQ Express, Eziban, NokNok, Menu finder, Bolt, and Uber delivery options are meeting consumer demands for convenience. With E-commerce industry bottlenecks, “Poor geo-coding systems and last-mile delivery costs (up to 15% of product value) hamper scalability (Jumia Ghana, 2022)”, limited formal address systems, these services have innovated through GPS, mobile tracking, and community-based delivery points.
The likes of Millennials and Gen Z, raised in the digital age, expect seamless, multi-channel shopping, fusing social media discovery with mobile payments and fast delivery. They show lower brand loyalty, forcing retailers to compete on shopping experience, customer service, and value.
Barriers and the Enduring Strength of Informal Trade
Ghana’s retail transformation has not been without challenges.
● Infrastructure: Poor roads, congestion, and inconsistent address systems complicate logistics and delivery.
● Affordability: A large segment of the population still depends on micro-purchasing, buying small quantities daily, which formal retail isn’t designed to serve.
● Cultural Familiarity: Informal markets remain deeply embedded in community life, offering trusted relationships and social engagement that supermarkets cannot replicate.
Government and regulatory agencies like the Ghana Standards Authority and the Food and Drugs Authority face the tough task of enforcing consistent standards across both formal and informal retail.
Initiatives like The Ghana Post-GPS addressing system and ongoing road upgrades are steps in the right direction, but more work is needed to support inclusive retail growth. “Despite modern trade growth, 60% of FMCG sales still occur through informal channels (Euro-monitor, 2023), creating a dual-system market.”
The Road Ahead: Balancing Innovation with Inclusion
Ghana’s retail terrain is a vivid example of how consumer behaviour drives structural change. The industry’s future lies not in a blanket shift from informal to formal, but in the continued evolution of a hybrid marketplace.
Retailers must innovate in experience, pricing, logistics, and digital presence to capture an increasingly informed, connected consumer base. Meanwhile, policymakers must balance enabling formal growth with supporting the informal networks that remain vital for livelihoods and food security of the majority.
Upgrading traditional Markets, incentivizing, formalisation, and expanding access to digital tools can help bridge the divide. The continued regulatory clarity and infrastructure investment will be essential in making the retail sector more efficient, structured (security and safety), inclusive, whilst widening regulatory oversight and tax net.
Ghana is leading the Way in cybersecurity by implementing the Cybersecurity Services Licensing Regulation, which is being led by the Ghanaian Cyber Security Authority.
These procedures, which are supplemented by the Financial Industry Command Security Operations Centre (FISOC), safeguard data and protect against cyber threats, thereby ensuring the integrity of digital transactions and deepening public trust whilst providing the needed safeguards.
Conclusion:
The evolution of modern trade in Ghana tells a story of resilience, ambition, and adaptability.
From its informal roots to its digitised, one-stop shopping centres and mall-driven presence, the retail sector continues to transform under the weight of consumer awareness, demand, and entrepreneurial drive.
Regulators have equipped and educated themselves to support this transition with adherence to global norms and standards, keeping a watchful eye on the industry, compliance, and trajectory (with solutions) for all stakeholders to grow in this push.
The Ghanaian shopper (often young tech-savvy metropolitan consumers on digital platforms), pushing retail firms to reach beyond physical locations, allowing customers, informed, price-conscious, and convenience-seeking, who are not just passive participants but the engine behind this transformation.
As Ghana steps further into the globalised, digital economy, the future of retail will depend on how well businesses and government align with this emerging consumer class, will serve both tradition and innovation in equal measure, as a gradual demand shift in urban retail is behind modern trade.
Source: Francis Sam