Sorana Georgia’s relationship with retail started almost 15 years ago, when she took over as a store manager with Metro Cash&Carry Romania. She stayed with the company until 2005, when she left the chief operating officer position for the same position with real, Poland hypermarkets.
In September 2008, Sorana Georgia returned in Romania and took over the reins of Spar franchise in Romania. She then left to run the Marionnaud chain.
“I believe I was a man in a previous life,” is how she explains her love for modern retail, which is dominated by male managers. Sorana Georgia and Edith Lenga-Balk (Selgros chief executive officer) are the only women at the helm of one of Romania’s modern retailers.
Sorana Georgia took at Billa Romania on July 1, at a point where consumer spending had declined by over 5%. In the two months since she joined Billa, Sorana Georgia realized the crisis was about to end and that a slight consumer spending rebound would be seen by yearend.
The crisis has changed Romanians’ consumption behavior. She says that unlike during the boom period, when Romanians went shopping once and filled their baskets for a week or more, now they go shopping more often and buy fewer products. “There will be no more consumer spending spree. We’ve become thriftier.” For instance, consumer spending will rise in 2012, but at a moderate pace.
As private labels hold a rising weight in Romanians’ shopping baskets, Billa also bet on Clever and My (cosmetics). The private label market neared EUR900 million last year and, in Billa’s case, sales of private labels got to over 10% of the total. As 2010 turnover reached 1.14 billion lei (EUR270 million), private labels contributed over RON110 million (EUR26 million), according to ZF estimates.
While in the case of private labels, Sorana Georgia reckons there is still room for growth, albeit limited, she says that in terms of the number of local Billa stores “the sky is the limit.” Having started the year with some store refurbishing, the company is readying for the first new store openings of 2011.
The network now including 55 stores is set to go beyond the 60-store mark by yearend. A store built from scratch costs around EUR2 million. For stores in rented spaces the cost depends on the area.
“The first store we’ll open will be in Brasov, and the next two in Transylvania”. She chose not to provide any details about the rest. Expansion will speed up in the following years, with ten stores set to be opened every year. Georgia says that in 2012 she wants to open the first stores before Easter. “It’s time for stores located close to the client.”
In the beginning, Billa stores had sale areas of 2,500 square meters, even five times larger than those of other supermarkets in Romania. “As there are not too many large spaces in city centers left, we will also switch to smaller areas.”
The financial crisis hurt Billa turnover as well, not just the consumption behavior. The retailer’s turnover fell from RON1.22 billion (EUR288.9 million) to RON1.14 billion (EUR270 million) last year against 2009, despite it having opened 12 stores.
However, Billa, part of German-held Rewe group, remained profitable, with a net income of just RON1 million (EUR0.24 million), against RON31 million (EUR7.34 million) in 2009. Sorana Georgia says turnover is set to rise this year, though, but at a low rate.
(EUR1=RON4.2228)
(English version by Catalina Apostoiu; Editing by Loredana Fratila-Cristescu, Radu Bostan)