“Revenue growth came amid expansion on the one hand, and on the rising sales of some already existent stores on the other one”, says Sorana Georgia, Billa chief executive officer.
Romanians are still seeking promotions, with price as the utmost criterion in the purchase decision. Thus, the number of items is rising, but value per product is falling, says Sorana Georgia.
“Clients are wary of spending much money. The number of clients is rising, even in the case of old stores, with a history of more than three years. However, cash receipts are dwindling”.
Sorana Georgia admits that the sales of some of the company’s stores are hurt not only by the low purchasing power, but also by the tight competition in certain areas of the country.
Billa is set to continue expansion at the pace of recent years, namely 8-10 new units annually. “We’ve already opened two stores and we have an opening scheduled for June. We’re keeping up the pace of recent years as the business is going well”.
Billa expanded strongly during the crisis, from 33 stores in 2008 to 80 in late 2013. However, in recent years, the company has opened ever smaller stores, of several hundred square meters, compared with 2,000 square meters during the boom years.
During the same period, total sales advanced by just 14% in lei. Thus, sales per store halved to RON17 million (EUR4 million). In the overall modern retail, the falling consumption on the one hand and rising competition on the other one halved sales per square meter.
During the same period, 2009-2013, consumption declined by over 15%. For 2014, though, a rising number of retail voices say improvements can be seen.
(English version by Catalina Apostoiu)