Retail Formats in CEE

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www.ceeretail.com
Popularity of modern retail formats on the rise in Central and Eastern Europe
July 2011
Modern retail formats remain popular in Central and Eastern Europe (CEE) despite the economic crisis. 68% of shoppers in the monitored region claim that hypermarkets, supermarkets and discounters are the places at which they spend the most substantial amounts on groceries.
Shoppers in CEE prefer supermarkets...

According to research carried out by Incoma GfK in 2010, 30%, or 44.3 million shoppers, in the 11 monitored countries of the CEE region, including the shoppers themselves and other members of their households, prefer supermarkets as the main FMCG retail channel. The most substantial proportion of shoppers who prefer supermarkets is found in Ukraine and Slovenia (52% and 50% respectively), and these are followed by Croatia (44%). On the other hand, Poland, the Czech Republic and Romania have the least substantial share of shoppers who spend more in supermarkets than elsewhere. About 37.4 million, or 25%, of shoppers in the countries monitored, state that hypermarkets are their main food shopping destinations. Hypermarkets are more popular than other shopping venues in urban Romania, the Czech Republic and Slovakia. Only 9% of shoppers in Bulgaria claim that they prefer hypermarkets for food shopping. Discount stores are the most popular grocery shopping venues among 16% of households in the CEE region. Discounters are not present among the main shopping venues in Bulgaria and Serbia, where small stores and other retail formats are the absolute leaders in terms of food shopping (53% and 60% respectively).
...but discounters most popular in Poland and hypermarkets in other core CEE markets
Only in Poland are discounters (30%) claimed to be more popular than both supermarkets (11%) and hypermarkets (27%). On the other hand, many Poles still prefer small stores and other retail channels for food shopping (32%). The number of stores in Poland is, in general, gradually falling, whereas the number of large-format stores is rising. According to the Polish Statistical Office (GUS), the number of supermarkets rose by 11.4% in 2009. At the same time, discount chains are gradually developing in Poland. By way of example, Biedronka intends to establish 100-150 stores per year in the following years.
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The main shopping place for food in the monitored CEE countries, 2009
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Ukraine 17 26 9 Croatia Poland Bulgaria 52 0 39 40 32 44 17 21 11 31 27 10 Serbia 37 20 Bosnia and Herzegovina Romania (urban) Slovenia Slovakia 35 46 31 0 53 25 5 19 30 24 17 30 32 60 30 12 8 25 1 34 50 22 12 18 31 21
Czech Republic
Hypermarket
Supermarket
Hungary
Discount store
Other/small store
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Source: Incoma GfK, 2010
The main shopping venue for food in urban Romania is the hypermarket (46%), and these are followed by discount stores (22%). Supermarkets have the smallest share of shoppers: 12%. Despite an overall reduction in FMCG spending in 2009, hypermarkets and supermarkets witnessed an increase in total household spending on FMCG in comparison with 2008. In the Czech Republic the most popular retail channel is the hypermarket (40%), and this is followed by discounters (24%). Only 17% of Czech shoppers choose supermarkets as their main shopping venue for food, and 19% opt for small stores and other retail formats. The financial crisis did not force Czechs to change their shopping habits significantly. In Hungary and Slovakia the distribution of shoppers preferences is broadly similar. The majority of shoppers in these countries choose hypermarkets (32% and 37% respectively). The proportion of shoppers who prefer small stores and other retail formats is 30% in both countries. Supermarkets and discounters are popular among 21% and 17% of shoppers in Hungary, whereas in Slovakia 25% of shoppers choose supermarkets and only 8% prefer discount stores. However, hypermarkets might lose their leading positions in both countries. According to the market research firm Terno, shoppers in Slovakia are increasingly abandoning hypermarkets, in favour of smaller establishments, such as supermarkets and small local shops, with better products. In Hungary the importance of supermarkets has grown steadily since 2006. However, according to GfK Hungary, the share of hypermarkets as a proportion of the retail market is not expected to increase significantly over the next 10 years, whereas extensive expansion activities are expected on the part of supermarkets and discount chains in Hungary.
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Increasing consolidation of FMCG chains

Whereas modern retail formats are remaining popular across the region, market concentration continues to increase. According to Incoma GfK, the Slovenian market has proven to be the most concentrated in terms of the distribution of preferences among the main shopping venues. Almost 100% of Slovenian respondents cited one of the Top 10 retailers as their choice of shopping venue. The figure for the 10 largest retailers is very high in Slovakia and Hungary (90% or more), with the Czech Republic following close behind (85%). In urban Romania the Top 10 FMCG chains are the main shopping venues for 72% of shoppers, whereas in Poland the figure is only 59%. The least concentrated market is that of Bulgaria, where the Top 10 retailers account for 48%.
Presence of retail chains in the CEE region

The major international chains are established in a number of monitored countries in the CEE region. Metro/Makro is present in eight countries of the region, and Billa, Kaufland, Lidl and Spar/Interspar in six. In the terms of representation, Interex, Konzum, Penny Market and Real are lagging behind, with a presence in only three countries of the region. According to research by Incoma GfK, in 11 countries of the CEE region Kaufland appeared to be among the three most popular shopping venues in five countries, and was followed by Tesco, which was cited as one of the Top 3 in four countries. Carrefour, CBA and Penny Market claimed one of the three leading positions in two countries. Of the four countries of the Viszegrad region (the Czech Republic, Slovakia, Poland and Hungary) Poland appears to be the most popular destination for the main retail chains. All six of the regions major retailers are well established in Poland, whereas only three of them are present in Hungary.
Share of Top 10 grocery chains on the main shopping place (%), 2009
Slovenia Slovakia Hungary Czech Republic Crotia Romania (Urban) Ukraine Poland Bosnia and Herzegovina Serbia Bulgaria 53 48
100 92 90 85 81 72 59 59 57
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Number of CEE monitored countries the chain operates in, 2009

Metro/Makro Spar/Interspar Lidl Kaufland Billa Tesco Mercator CBA Carrefour Auchan Albert/Hypernova Real Penny Market Konzum Interex
8 6 6 6 6 4 4 4 4 4 4 3 3 3 3
Biedronka most popular retailer in CEE

Biedronka is the most popular store in the Viszegrad region despite the fact that it operates only in Poland. Fourteen percent of shoppers (9.1 million) choose it as their main FMCG shopping venue. Biedronka is followed by Tesco (13%) and the COOP(7%), which are present in all four countries of the region. The COOP is not a part of a united retail network comparable with those of the multinational chains, but it has a strong position in the region. Kaufland, which is well established in the Czech Republic, Poland and Slovakia, is preferred by 6% of shoppers. Five percent of buyers prefer Carrefour, a French retail chain present in Poland and Slovakia. This is identical to the share of Lidl, which is present on all four Viszegrad markets.
Methodology note: The research by Incoma GfK was carried out in 11 countries of the CEE region: Bosnia & Herzegovina, Bulgaria, Croatia, the Czech Republic, Hungary, Poland, Romania (urban population only), Serbia, Slovakia, Slovenia and Ukraine. The following retailers are assembled on the basis of their form of ownership under the term COOP: Coop (CZ), Coop (HU), Jednota (CZ), Jednota/Coop/Terno (SR), Konzum (CZ), Spolem (PL), Terno (CZ), Tip (CZ), Tuty (CZ). GfK has not disclosed the Top 10 retailers lists for each country participating in the research.
This article has been published in the Central Europe Retail Update, a weekly newsletter published by PMR, tracking recent and prospective developments on retail markets of Central Europe.
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About PMR
PMR Publications (www.pmrpublications.com)
provides reliable market intelligence for business professionals interested in Central and Eastern European countries as well as other emerging markets. Publications by PMR analyse the business climate in the region, in particular in the construction, retail, IT, telecommunications and pharmaceutical sectors. PMR Publications offers both free and paid subscription newsletters, internet news portals and in-depth reports. To find out more about Poland and Central and Eastern European countries please visit www.polishmarket.com and www.ceemarket.com as well as regional and national sector portals dedicated to construction (www.constructionpoland.com, www.constructionrussia.com, www.constructionukraine.com, ceeconstruction.com), IT and telecom (www.itandtelecompoland.com, www.ceeitandtelecom.com, www.ictrussia.com), retail (www.retailpoland.com, www.ceeretail.com, www.russiaretail.com) and pharma (www.pharmapoland.com, www.ceepharma.com).
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FREE ARTICLE

Shoppers in CEE prefer supermarkets...

Source: Incoma GfK, 2010

Increasing consolidation of FMCG chains

Presence of retail chains in the CEE region

Source: Incoma GfK, 2010

Number of CEE monitored countries the chain operates in, 2009

Biedronka most popular retailer in CEE

PMR Research (www.research-pmr.com)

PMR Consulting (www.pmrconsulting.com)

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