Top 10 Events That Marked Food Retail In 2011

12.15.2011 By Cristina Roşca

Although the crisis has lingered on and consumption continued to decline, 2011 has been a good overall year in the retail sector, estimated at EUR16 billion. The new market entries, the launches of new formats, as well as the openings of hundreds of stores, are the main events that marked food retail in 2011. ZF starts a retrospective of key moments for the leading business sectors.

1. LIDL enters the market, becomes most extensive retail chain

Germany's Lidl officially entered the Romanian market this year by taking over the 107-store Plus Discount chain. At the beginning of October, the German company, which started the strongest expansion seen on the local retail sector in the last few years, announced its plans for Romania: 135 stores by 2012.

Since October, the retailer opened 22 stores built from scratch, reaching a 129 store-network, which makes it the most extended chain in modern retail.

Moreover, Lidl's entry on the local market brings another change to modern retail. The German discount chain came with a new business model - over 80% of the products on the stores' shelves are private labels. In the case of other modern retail players, private labels barely account for 20% of the overall products.

2. Market exit of G'Market, first foreign player to exit retail

One of the first foreign players in modern retail, G'Market, held by Turkey's FIBA group, left the market after the Competition Council approved the takeover of its last three stores by Belgium's Mega Image.

3. Carrefour comes with a new format, signs a partnership with Angst

France's Carrefour, present on the local market on the hypermarket and supermarket segments, also entered the segment of convenience stores with the Carrefour Express brand. The French giant sealed a franchise agreement with the store chain of cold cuts producer Angst. Angst is set to be fully rebranded by the end of 2012 as Carrefour Express following an agreement signed by the two parties. Cold cuts producer Angst has a chain of 24 stores in Bucharest, with areas ranging between 150 and 1,000 sq m. So far three stores have been opened under the Carrefour Express brand, in partnership with Angst, with the first one opened in early October. 21 openings are left.

4. Kaufland reaches second position in retailers' ranking

Germany's Kaufland, part of the Schwartz group, last year left Carrefour behind in the ranking of the largest retail chains on the Romanian market, with 4.67 billion lei (EUR1.07 billion), up 26% against the preceding year.

Carrefour, present on the Romanian market with Carrefour Market supermarkets, last year posted an overall turnover of RON4.32 billion (EUR0.99 million), down by RON4.7 billion (EUR1.08 billion). The leader of local commerce remains Metro Cash&Carry Romania, with over RON5.27 billion (EUR1.21). The German retailer was also the most profitable retailer in Romania, announcing earnings of RON172 million (EUR39.6) in 2010, twice as much as the RON79 million (EUR39.6 million) recorded in the preceding year. (EUR1=RON4.3415)

5. Mic.ro starts to close down shops

Shop no. 256 of the Mic.ro chain, developed by businessman Dinu Patriciu, was closed down at the end of October, a few months after its opening. The shop on Doctor Felix street in Bucharest was opened this summer. According to ZF data, this is the first Mic.ro shop to close down in Romania, around 18 months after the chain was launched with a shop in the Stefan cel Mare area in Bucharest. The shop is one of the around 100 franchised stores. According to market information this is not the only closure. Company representatives say some stores will be closed down, but only to be relocated to other areas.

6. First billion euros from private labels

On a retail market where price is the only battleground, large players' private labels, until not long ago unknown or avoided by Romanians, are increasingly gaining ground, with the market to exceed EUR1 billion this year.

"Romanians, similarly to inhabitants of other European countries, are looking for the lowest price, both in times of crisis and of economic stability. That is why they are turning towards private labels. In western countries this segment reached 25% of our turnover. Here it is at 12-14%. There is still room for growth," says Philippe Lejeune, head of Cora.

7. Hundreds of millions of euros in new stores

Although consumption continued to decline, retailers present on the Romanian market pursued expansion, investing hundreds of millions of euros in hundreds of new stores.

The most active were Lidl, Profi and Mega Image, each opening over 20 stores. Close behind were Kaufland and Carrefour, especially on the supermarket segment.

8. First Romanian woman at the helm of a top-ten chain

Sorana Georgia, 48, was appointed manager of supermarket chain Billa, the only Romanian woman at the helm of one of the 15 modern retail chains on the local market. About her departure from the helm of Marionnaud perfumeries to one of the top supermarkets in Romania, Georgia says "I returned to my first love."

9. Cora announces giant expansion plan

French-Belgian retailer Cora, which owns the most profitable stores on the local market, this year obtained a EUR210 million loan from the European Bank for Reconstruction and Development to finance its expansion on the Romanian market. Cora Romania will invest EUR397 million in the opening of local stores, according to the EBRD.

This is the largest loan granted to a Romanian retailer in recent years. Cora announces it has already obtained the loan from the EBRD, and will use the money to open 20-25 new stores.

10. New market entries and exits? (Tesco, Leclerc)

This year rumors as to retail market entries and exits have been rife on the market. Rumors as to the market entry of UK retailer Tesco returned to the forefront. Recently information emerged, according to which French hypermarket chain Leclerc could enter the Romanian market next year. On the other hand, there were also rumors about the exit from the market of Penny Market, which have yet to be confirmed.

(English version by Daniela Stoican)