Lidl and Penny Market will end this year with 297 stores, 40 more than at the beginning of 2012. The two German chains, which have 2,000-3,000 sq-m stores, had an investment budget of EUR30-45 million for this year, according to ZF estimates. This allowed them to improve their territorial coverage.
Several companies used to compete on this segment of modern retail in the past, but only two are now left – German chains Penny Market and Lidl, two of the companies with the most extensive chains in local modern retail.
Another company that used to operate as a discount chain was Profi, controlled by Polish investment fund Enterprise Investors. But Profi has repositioned itself as a supermarket.
The leading move on the discount segment this year was the exit from the market of Minimax Discount, controlled by businessman Dinu Patriciu. The retailer closed down all shops in 2012 and went bankrupt. So the war of small prices is now waged by only two companies, which are among the strongest in Europe.
Lidl officially entered the Romanian market in 2011 by taking over the Plus Discount chain. Since its market entry, the company has opened around 50 stores.
Discount store chains are present both in large Romanian cities and in smaller towns with less than 20,000 inhabitants. This is the only modern retail format that has covered all Romanian counties.
The two retailers have expanded their chains in the past few years despite the difficult economic conditions and the overall consumption decline of almost 20% between 2009 and 2011.
Relying only on their low prices, discount chains managed to boost their turnovers even during the years of crisis, performing better than the largely food-based retail. Last year the turnovers of discount chains went up by almost 11%, to nearly EUR810 million, while consumption fell 3%.
In fact market research company PMR predicted a few months ago that the growth rates for the next three years (2012 included) will be even higher than last year, exceeding 20% in some cases. Under the circumstances, discounters’ turnovers could approach EUR1 billion.
ZF has estimated discounters’ turnovers based on the2011 turnovers published on the Finance Ministry website, to which the growth rates predicted by PMR were applied.
(English version by Daniela Stoican)