“There is no other way for retailers to gain additional market share unless they expand into other formats. The market is saturated and one needs to reinvent oneself to be able to grow,” says a top executive in the retail sector.
Modern retailers expanded by almost 250 stores last year alone, with supermarket, discount and convenience store chains opening most of them.
On the other hand, cash & carry companies Metro and Selgros did not open any new store. The hypermarket chains (except Kaufland) are no longer expanding on this format as fast as they used to, either, as the market is mostly covered.
Under the circumstances, companies are trying their luck with other formats. Metro Cash&Carry, for instance, inaugurated its own LaDoiPasi branded store entering the retail segment.
Metro Cash&Carry’s core business in Romania and abroad is wholesale trade. Unlike hypermarkets, supermarkets and discount stores, Metro Cash&Carry stores mainly serve legal entities, that is small grocery stores, restaurants and coffee shops.
Metro introduced the LaDoiPasi concept in the spring of 2012. It was designed as a franchise for small Romanian retailers that are actually Metro’s customers. The number of such stores grew to a peak of 700 a year ago after which it dropped to about 600. Under the circumstances, Metro decided to open its own LaDoiPasi on Soseaua Stefan cel Mare close to the Bucharest city center.
“The LaDoiPasi store on Soseaua Stefan cel Mare is a concept-store dedicated solely to testing solutions to develop the franchise. We are testing new fresh product ranges and various layout options,” Metro Cash&Carry officials said.
The current focus is not on developing Metro’s own network of stores, the concept store was designed as a way to get the input and feedback from customers directly, to be able to get a feel of the market and how it moves, they added.
The launch of this store and Metro Cash&Carry’s entrance on a new market segment comes at a time when Metro’s’ revenue dropped to EUR909 million in the fiscal 2013-2014, a 7% decline on the previous fiscal year, according to its report.
Carrefour, the group that introduced hypermarkets in Romania in 2001, last year announced it would take a first step on the cash&carry segment, hoping to narrow the gap to market leader Kaufland. Carrefour covers all store formats available in Romania: hypermarket, supermarket, convenience store, online store, discount store (Supeco) and cash&carry.
(English version by Loredana Fratila-Cristescu)