One of the reasons for Selgros’ success in its tenth year on the retail market was its strategy of discounts and promotions, according to the report of the Swiss-held Coop, which owns Selgros Cash & Carry.
Price has become the first thing Romanians look at when they go shopping and special offers, discounts and promotions have become retailers’ main strategy to lure customers into stores.
Alexandru Vlad, Selgros Cash&Carry chief executive and one of the few Romanians at the helm of a multinational retail company, said a few months ago that retailers should focus on retaining their customers, which is now the most important indicator, even more important than sales and profit.
Vlad also said there are no secret recipes as to attracting and retaining customers. All one company needs to do is analyze consumer behavior, shopping basket and make every possible sacrifice to keep its customers.
Consumer spending went down again last year, following the trend that started in 2009. Still, the 2011 decline was 3%, lower than each of the previous two years.
The decline in consumer spending made an impact on Selgros’ turnover only in 2009, when its revenue fell by more than 15% to EUR861 million. In 2010, the company reverted to growth.
Selgros opened a store last year, but did it in December, so that the growth of nearly 2% can be considered organic.
The network, which is one of the most prudent on the local market, opened its 19th store in Constanta, where it already had one running. This was the first opening in three years. The investment in each Selgros store stands at about EUR20 million.
According to the report of Coop, which bought German-held Rewe out of Selgros early last year, Selgros invested EUR38 million on the Romanian market in 2011. The Selgros officials did not announce the acquisition of new land for stores or a new opening. They did, however, say they invested about EUR3 million, according to ZF estimates, in remodeling some of the already existing stores.
As regards the company’s expansion plans, Vlad said a couple of months ago that the target was to reach 21 stores, but did not specify when or where the new stores would be opened.
(English version by Loredana Fratila-Cristescu)