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Discounters’ revenue grows 115% in the last three years in Romania

In the last three years discounters have opened more than 200 stores, a number greater than in the first seven years of their operation on the Romanian market.

GENERAL MERCHANDISE

Discounters’ revenue grows 115% in the last three years in Romania

In the last three years discounters have opened more than 200 stores, a number greater than in the first seven years of their operation on the Romanian market.

The discounters’ sales results are far better than in the grocery sector, as in 2010 revenues of discount stores rose by 13.1% while the whole market went down by 2.1%. The companies’ future plans assume the opening of 300 more stores within the next four years and gaining at least a 10% market share.

The Romanian discount chain market consists of six banners. The first, Profi, appeared in 2000. The next two were opened by Rewe, i.e. a large-format Penny Market XXL from 2001 and a smaller, Penny Market, from 2005. Plus Discount chain entered the market in 2005, but in 2011 it was acquired by Lidl, which entered the market at the same time. The only local chain, miniMAX Discount, a joint venture of Romanian and foreign investors, which was set up also in 2005, was taken over last year by Mercadia Holland BV and is planned to be rebranded as Mac.ro chain. Last but not least, the sixth banner, Red Market, was launched in December 2009 by Mega Image.

Not only are discount chains present in the most populous cities in Romania but they also penetrate smaller cities as well. The chains also target towns above 10,000 inhabitants. In 2010, 363 discount stores were located in 158 cities and ran by the five leading players.  “In the last two years, there were nearly 150 new discount stores opened, and this year only a slight slowdown in the number of new openings has been observed,” Jarosław Frontczak, a Retail Analyst at PMR, says.

Most discount chains are enjoying a sturdy organic sales growth and also continue to expand their stores. “All chains plan further expansion and aim at investing in more new stores, with some retailers planning to triple or double their current store count by the end of 2015. Therefore, the discount share of the market is expected to increase in the coming years as a consequence of the rapid expansion and also a more favourable situation for this format, as consumers are more price conscious after the economic crisis,” Jarosław Frontczak explains.

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