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7 яну 2018, 8:01, 2853 прочитания

Retailers beat: still growing

The fast moving consumer goods sector continues to grow, albeit with slower speed, seeks more local suppliers and opens the door for local producers to enter foreign markets.

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The turnover of the Bulgaria's top 100 largest retailers for 2016 is a little over 9 billion levs, indicating a growth of 10% compared to 2015. The 2017 results will become clear later on this year, but judging by the responses of the managers of some of the largest fast moving consumer goods (FMCG) retail chains, they will be up once again.

There were several major trends in the sector in 2017. The most striking one is the growing number of outlets. Retailer chains now work more with local suppliers - farmers, dairy and meat processors, etc., some of which export products to stores abroad. Another rising trend is the offering of an increasing number of bio- and health products in stores - a result of the growing demand.


Over the last three years three large retailers have disappeared from the FMCG market. In the autumn of 2015 the German Rewe Group announced it would withdraw its discounter Penny Market from the country. In 2016 the last Carrefour stores in Bulgaria were closed and in the spring of 2017 the Piccadilly chain ceased operations. By the end of 2017, however, the Macedonian CAM, which is a representative of the "hard discount" type of stores (i.e. sells at prices below the typical market price) entered the country.

Capital Newspaper asked the managers of the six largest food chains about their expectations.

Dimitar Spasov, Chairman of the Management Board of Kaufland Bulgaria: We are planning a large expansion of our central warehouse

Фотограф: Анелия Николова

In 2017 we maintained the leading position in the FMCG sector, both in terms of revenue and turnover, and customer flow. We have introduced a new concept in the construction of our stores, aiming to facilitate the customers as much as possible and make shopping easier and faster. Our first store built and designed based on the new concept, was opened in Varna in October 2017. By mid-December 2017 five of our existing subsidiaries in Sofia, Varna, Plovdiv and Vratsa were renovated.



In 2018 we plan to open two new hypermarkets - in Veliko Tarnovo and Varna. We will also continue the modernization of our subsidiaries in the country. The investments planned for 2018 amount to 100 million levs. A large expansion of our central warehouse in the village of Stryama, which will be enlarged by another 25 thousand sq. m., is also pending.

The Bulgarian customers continue to highly value the combination of quality, exclusive prices and surprising promotions. They are becoming increasingly demanding and their shopping choices are becoming more conscious. Kaufland Bulgaria puts a strong emphasis on quality, recognizable and well established brands, healthy lifestyle, but what we have preserved is the opportunity to offer a huge selection and the price-quality ratio typical of Kaufland Bulgaria.

Consumers still prefer to buy goods, the quality of which they are able to check before making the purchase and by choosing on the spot. An online marketing project is in its test phase, but our focus remains on developing the full potential that "live" trading can offer.

Attila Yenissen, CEO of Metro Bulgaria: We will change the Dairy and Fish sectors
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Фотограф: Николай Дойчинов

In 2017 Metro Bulgaria managed to reach business growth exceeding 4% and to increase its profits. We decided to support and protect the authentic Bulgarian agricultural products. In October 2017 we launched our new bio-divisions in all 11 stores of the company. In November 2017, we also gave a new start to our wine departments.

On the eve of 2018, Metro invested over four million levs in the opening of a new logistics center for the supply of food products for restaurants and hotels. Metro is also investing in a new distribution platform in Varna, which will be opened in early June 2018.

In 2018 we are going to restart the Dairy and Fish sectors. Our commitment to local farmers represents a serious and important investment and a special interest of ours. With their support, in 2018 we are going to export Bulgarian pink tomatoes to four European countries.

I believe that, especially in the big Bulgarian cities, the desire of customers to go out and eat outside their homes will grow. That is why we will continue to focus on providing quality services and solutions to the Horeca sector. Bulgarians are starting to develop preference and taste for new meals and new world cuisines.

Milena Dragiyska, Chief Executive Officer of Lidl Bulgaria: We will continue our sustainable partnership with the Bulgarian producers

Фотограф: Надежда Чипева

In 2017 we opened our second logistics center in the village of Kabile, making an investment of more than 80 million leva. Thus we created 150 new jobs in the region. We opened stores in places where Lidl was not present and invested in a significant update of our store network.

In 2018 we plan to open at least 5 new stores, with our interests being focused in the capital and the Black Sea. A little more than a year ago we introduced our new branch concept, applied for the construction of all of our new stores. It provides many more customer amenities, an improved work environment for our employees and environmental care. We will continue upgrading some of our stores.

If I have to make a tour of the store, I'll start by saying that we updated the assortment of fresh bakery products. Fresh fruits and vegetables will always have a major place on the Bulgarian table. We are going to offer new products of the Rodna Stryaha selection, providing the Bulgarian producers with real chances to develop and enter foreign markets.

I hope that in 2018 the positive trend of growing consumption will remain, and we will be able to rely on a predictable and stable economic environment.

The fact is that online shopping is spreading more widely. This step, however, requires a very serious and large-scale preparation, in order to meet significant requirements, and a complete reorganization of the workflow. In order to enter the online trade, we must be absolutely sure that we can guarantee the same quality and freshness, the way we guarantee them at our stationary stores right now. At the same time, online business requires totally different logistics - this is also a large cost item. We believe in online trade, but the desire for social meetings is deeply rooted in the Bulgarian mentality. Therefore, we believe that stationary trade also continues to have an important place in shopping habits.

Boyko Sachanski, Manager of Billa Bulgaria: In 2018 we will open 8 to 10 new stores

Фотограф: Анелия Николова

In 2017 we opened eight new Billa stores. The construction of another two has started and they will be opened in the beginning of 2018 - one in Varna and one in Sofia. An average Billa store creates about 30 jobs, but some can reach 100. 7 stores have been extensively reconstructed and we carried out the so-called soft refresh in 15 others. Having 118 stores in the country, Billa is ranked first by number of stores.

In 2018 between 8 and 10 Billa stores will be opened and nine major reconstructions of retail outlets will be performed.

More people will be on their way to healthy eating and the proportion of these foods will also grow.

The double-digit growth in the development of the major players over the last years will not be repeated. Modern trade will continue to increase its market share, but slowly - by no more than 2-3%, and will remain far below the level of other Central and Eastern European countries.

Next year Billa will not launch online trading.

Miroslava Georgieva, Marketing and Advertising Director at Fantastico: We will continue to fully develop online trade

Фотограф: Асен Тонев

In 2017 we opened two new stores in Elin Pelin and Mladost 1 in Sofia. The investment therein exceeds 18 million leva. For 2018 we have planned several new stores to be opened and a major reconstruction of an existing supermarket to take place.

The customer experience is becoming more and more decisive for the trader’s success. That is why in recent years we have concentrated on building larger stores, where our product selection is focused on diversity and quality.

Loyalty to a particular trader will grow. The low price is certainly not as decisive anymore. Consumers are continuously finding and seeking new opportunities for shopping, eating trends, new products, food production technologies and the market has to offer them.

Our plan is to continue developing online trade in full force. This type of trade is growing at an extremely fast pace and we are currently the only company in the food sector, offering and developing it.

Edvinas Volcass, Managing Director of Maxima Bulgaria: We plan to expand our range of products

In 2017 Maxima Bulgaria reconstructed 11 of the T Market stores and opened 4 new ones. Two of them are in the capital, one in Kostinbrod, and the last newly opened supermarket is located in Kazanlak. Thus, the number of T Market stores has grown to 65. The company employs almost 1,400 employees in 32 cities.

In 2018 we are going to open new sites and reconstruct some of the first T Market stores. We start the year with the opening of another new store in the capital.

We are planning to expand our range of fresh products and include new ones, including more bio and healthy products, since consumers are becoming increasingly interested in these categories. Next year we expect again the highest demand to be for fresh meat. Since the beginning of October 2017 we have also been marketing our spice line called Giardena.

Currently, the share of modern trade in Bulgaria is just over 50%, but the interest in this model is steadily growing. This is also due to the gradual growth of the purchasing power of the population. In 2018 the retail sector will continue to move ahead at a rapid pace, and the presence of new supermarket models in Bulgarian cities will be increased.
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Етикети: Billa Kaufland Lidl Metro T Market

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