“We’ll continue the consolidation and organic expansion of our network in 2011, as well,” says Milan Radin, general manager of Drogerie Markt Romania. “We expect slight consumer spending rebound, but not to the level registered three years ago, as consumers are more cautious now. VAT hike hammered the entire retail and the fallout is still being felt.”
The network that arrived in Romania in late 2007 currently has 41 stores particularly in the central, western and south-eastern regions of Romania. Most drugstores, namely eight, are in Bucharest, while three are located in Timisoara and Arad each. The German company is present in 25 Romanian cities.
Drogerie Markt representatives say they focus on large cities “as population and purchasing power are among the criteria we follow. However, the trend of retail in the area and the presence of other players are also of importance”.
Whereas last year Radin said he wanted to end 2011 with 50 stores, now he does not provide any more figures. Asked about how many more Drogerie Markt stores Romania could host, he said, “it’s very difficult to make predictions about the future. Everything depends on the development of the Romanian market, on macroeconomic factors, on the overall economic climate”.
As for store locations, the company is particularly looking at street-front retail space, but does not rule out malls, either. Irrespective of locations, though, the German company goes for rented spaces.
Drogerie Markt stores have an area of 300 to 500 square meters. Although Radin did not provide any figures, the investment in a store stands at about EUR500,000, according to previous information.
The network, which opened ten stores per year on average, last year reached turnover of 56.7 million lei (EUR13.4 million), 81% higher than in 2009. In 2010, the company saw losses deepen to RON15.4 million, from RON13.6 million in the previous year. (EUR1=RON4.2228)
(English version by Catalina Apostoiu; Editing by Loredana Fratila-Cristescu)