Betting on fast expansion, the Belgian retailer has in recent years filled around 90,000 square meters (9 hectares) in Bucharest, becoming thus the biggest tenant on block ground floors in Bucharest, according to ZF estimates.
Mega Image group centered on Bucharest from the very beginning, but has stepped up expansion in the past three years. Since late 2011 until today, the network has come from 105 to over 350 units and has become the largest store chain.
The Belgian group entered Romania in 2000, when it took over, from Greek family Malideros, the Mega Image chain founded in 1995. The group retained the Mega Image brand for supermarkets and brought another two Shop&Go units for proximity stores and AB Cool Food for the only frozen product store.
The group had also brought a discount format, Red Market, but it withdrew it from the market in 2011.
Xavier Piesvaux says the network will focus further on Bucharest, where it has 275 stores, as in Romania it is positioned at the middle of the ranking of modern retail by revenue. Thus, it would be very difficult for the company to climb in the ranking led by Kaufland, Metro Cash & Carry, Carrefour and Auchan, each with over EUR1 billion in revenue.
The Belgian group went beyond the threshold of EUR500 million as late as last year. However, Mega Image operates on the segment of small-area stores.
“In 2014, the main objective of our strategy has been expansion in Bucharest. Considering our position on Romania’s retail market, 5/6, we did not focus on several cities in the country and we chose to continue expanding in Bucharest,” says Xavier Piesvaux in his first interview with ZF.
The executive has worked for Mega Image Romania for almost nine years. Before joining the Belgian group, he worked in the same field of retail, but for French Carrefour.
Mega Image’s aggressive expansion is changing the landscape of local retail as with the opening of a store very many traditional retailers are vanishing.
Lately, the company has bet more on the Shop&Go proximity stores that have a smaller area and spaces for rent can thus be more easily found. The number of such stores has recently overshot the number of supermarkets.
Mega Image officials says that according to information on the company’s main market, that of Bucharest, there is room for its own expansion and for rivals’ expansion. According to Mega Image’s 2013 report, the company held a 20% market share in Bucharest.
Mega Image invests in Bucharest and Romania more than EUR40 million each year, both in stores and warehouse construction, according to Xavier Piesvaux.
This year, the group has opened over 60 new stores. “We have several projects, some of them have already started being built and we will end the year in line with our budget estimates for 2014,” says Piesvaux, without providing any figures.
According to ZF estimates, the group will open around 100 units overall this year.
Mega Image retail chain is about to open a store in the center of Bucharest, in a space previously occupied by one of the symbols of communist retail, the Eva fashion store on Magheru Boulevard, retail market sources say.
The company has so far expanded mainly in Bucharest and in the counties close to the capital city, such as Constanta, Giurgiu or Brasov.
“We will further expand our store network. At this moment, we are speaking of Bucharest, but also of other cities that meet our criteria”.
Xavier Piesvaux says he does not rule out the possibility of the group bringing a new store concept, but for the time being it is focusing on the already existent formats. Moreover, the company will further develop the “Concept Store” format under which two stores have already been opened in Bucharest.
These stores have a bigger area and a wider product range.
Mega Image is expanding both directly and through acquisitions. Thus, it bought networks such as Angst, part of Luca stores of Brasov, Gmarket, La Fourmi, Primavara or Prodas. Moreover, the company has also launched online operations in partnership with eMag.
(English version by Catalina Apostoiu)