“Though the economic situation is challenging, we cannot freeze expansion. This year, we will open three new coffee shops, two in Bucharest and one in Oradea. Two will be opened in a franchise system and one will be opened by us, who own the master franchise for Romania,” says Radu Cristian Marinescu, who has run the network’s operations since 2005.
After some two years, rival Starbucks also arrived on the market, with Marinescu saying it tightened competition, but also helped the operations of Gloria Jean’s, a network brought in a franchise by company Gourmet Products Servicii.
“When we entered the market, we introduced the self service-take away service. Clients had to go to the bar and order, there was no waiter serving them. At the beginning, it was difficult, as Romanians were used to sit in comfortable armchairs and be served”.
The company still bets on the same model in all the coffee shops it owns and in the ones due to be opened.
Marinescu says that as a rule, outside Bucharest the company seeks to expand in a franchise system. The company generally targets cities of over 200-300,000 inhabitants.
Though most coffee shops are in Bucharest, Marinescu says there’s still room for growth and this is why two of the new openings will be in the capital city, one in Anchor Plaza and one in the Universitatii area.
While many Romanians entrepreneurs and businesspeople look at 2012 and even the second half of this year with optimism, Marinescu is downbeat. Asked what he will do he says “we’ll wait for summer to go”, adding the business is influenced by seasons and weather.
As regards this year, he is also pessimistic, saying it has been worse than 2010, but that differences are significant. “I do not see major increases in 2012, either”.
The consumption behavior has changed in recent years and people are more reluctant to spend. Thus, with the dwindling purchasing power, traffic also went down. Gloria Jean’s clients have above-average incomes, according to Marinescu. Consumption per person revolves around 16 lei (about EUR3.7), according to ZF calculations, on the basis of data provided by the company.
Crisis has seriously impacted the coffee shop segment, with several tens of units vanishing from the domestic market in the past two years. Gloria Jean’s also cut its number of coffee shops to seven. “In time, since our arrival on the market, 12 coffee shops have been opened. Now, there are seven left”. The best coffee shop, by traffic and sales, is currently the one of Mall Vitan, which has between 7,000 and 10,000 clients per month, depending on the season. (EUR1=RON4.2442)
(English version by Catalina Apostoiu; Editing by Ioana Tudor)