The growth is relatively constant as far as discount retailers are concerned, regardless of the state of the economy, says Daniel Gross, managing director Rewe Romania, the operator of the Penny Market chain. More precisely, a retailer using a different format will feel a greater impact during both good and bad times.
Rewe Romania, which operates the more than 210 Penny Market stores posted RON2.87 billion revenue in 2016, an increase of about 8%.
“We did well in 2016 and the trend continued in 2017. Retailers which sell more expensive products see higher growth but also steeper decline in times of crisis. We, given our format, see less spectacular growth but also less spectacular declines in times of crisis.”
Price remains the most important factor in Romania but customers also make their choices based on the store design or other things they can only find at that particular store, such as a specific product category or fresh bakery corners.
Penny Market operates on the discount store segment in Romania and has only one international rival, Germany’s Lidl, in this country. The two expand to both big cities and small and medium-sized ones.
“This year’s investment budget is EUR80 million.”
It is divided into five components: the opening of the warehouse in Bacau (this spring), the opening of 20 to 25 stores (work in progress, eight have opened so far), the remodeling of six XXL Mega Discount reopened as Penny Market (completed), the remodeling of 51 Penny Market to the newest standards (in progress, 43 done so far) and the expansion of the warehouses in Turda and Stefanesti (in progress).
“We will have 212 stores in Romania at the end of October and plan to reach 220 to 225 by yearend, and 400 in the next few years.” (EUR1=RON4.5729)
(English version by Loredana Fratila-Cristescu)