The German-owned retailer took the top spot in the modern retailer ranking for the second year in a row, followed by Carrefour (EUR1.12 billion revenue) and Metro Cash&Carry (EUR1.018 billion, according to the official report of the company, as it did not file a report with the Finance Ministry).
“Kaufland’s edge is that they have a hypermarket image and a discounter store pricing policy. They associated the brand with low prices,” says Marcelo Mihai, senior consultant with advisory firm Geva&Company. “Moreover, they opened stores within walking distance in populated areas, in city centers.”
Kaufland beat the other modern retailers in Romania for the first time in 2010-2011, surpassing Carrefour and then taking the top position from Metro Cash&Carry, the leader of the modern retail since 1996, when it was first introduced in Romania. Last year, Kaufland consolidated its position.
Moreover, while many retailers preferred to sit and wait, Kaufland expanded, thus increasing revenue and customer base. It ended last year with 81 stores, ten more than in early 2012, spending EUR50 million.
When picking cities to open hypermarkets in, Kaufland looks at the catchment area (within a radius of 10 to 15 kilometers). It usually prefers areas with at least 60,000 inhabitants no farther than 15 to 20 minutes from the store. It also looks at the retail floor space already existing in the area, which determines how big its store will be and where it will be located.
Kaufland has tried to find space in central areas in cities since entering Romania if possible. It has opened four stores since the beginning of the year and could open more for a total of eight or nine by the end of 2013, according to information on the market.
It ended last year with net profit of RON275 million, up almost 60% on 2011, which puts it on the top spot among most profitable retailers. The second in the ranking, the Carrefour group, posted EUR23.5 million profit. (EUR1=RON4.421)
(English version by Loredana Fratila-Cristescu)