Forton

CONSUMER MARKET CHAINS EXPAND IN MACEDONIA

CONSUMER MARKET CHAINS EXPAND IN MACEDONIA

The Macedonian market is becoming increasingly saturated with consumer supermarkets and it is expected that after a certain period, only the larger and better positioned will maintain their existence, according to Forton - commercial property advisors.

 

In 2012 the large supermarket and discount chains continued their expansion with new locations. The largest market share at that time was held by the local brand "Tinex" - with 7%, followed by "Vero" with 5% and "Kam" - with a little under 5%.

 

The situation since then has changed. "Tinex" & "Vero" have oppened several markets in multiple cities accross the country, "Ramstore" expanded it's network in Skopje & Tetovo, and in 2012 the international brand "Carrefour" established its presence in the capital city.

The research of this segment done by Forton Macedonia shows that there is in fact a large expansion of supermarkets in Macedonia during the last 12 months. New locations have been presented by mostly the larger but also by the smaller companies operating in the business. Vlatko Bogoevski, general manager of Forton Macedonia, explains that "each country from the Balkans is quite a small market by it self, and any of the large supermarket chains cannot be successfull if it is only focused on only one country alone". As an example he points out the merge between "Agrokor" and "Merkator" in order to be competitive on the euro-markets.

 

The Macedonian market definitely is becoming saturated by supermarkets and we expect after a certain period, only the largest and better positioned to be sustained. More precisely, those with more locations, better pricing policy, etc. At the moment, smaller market chains hold 30-40% of the market share, and part of them are intensifying expansion. But after a while there will be no more than 8 brands in the country which are present at the moment because there are too many markets.

Local mini-markets will dissapear in time because they cannot compete with the big markets with more products at lower prices - according to Bogoevski.

 

The largest and most successfull

 

According to the data published in the last edition of "the 200 largest and most successful companies" for 2013 the largest company from the respective industry is "Tinex" on the 15th place but it is not the most profitable. After "Tinex", sorted by size, follows "Kam" on the 23rd place. "Veropulos" occupies the 24th place and "Skopski Pazar" - the 59th place. Among the 200 largest there are the following notable companies - "Zhito", "Ramstore", Tediko Super" and "Stokomak".

 

According to the earnings of each company, the best rank belongs to "Veropulos" at 16th place with 6,2 mil eir in 2012, followed by "Kam" with 4,4 mil eur, "Ramstore" with 3,2 mil eur and "Tinex" with 3,05 mil eur.

 

Potential entrance of a new regional brand

 

Despite the current large number of markets, Mr.Bogoevski still maintains that there is room for new ones, considering the rising standard of the population. He explains this with the fact that when the public standard rises, consumers focus on a healthier diet, which represents a key chance for supermarkets.

 

The analisys of Foton Macedonia shows that for now no particular entry is expected from any foreign brand in the country, as it is with the German brand "Lidl" that annonced its entry into Serbia.

 

-"From our contacts we understand that "Lidl" in the following three years does not intend to enter this market. An entry is possible further along by a regional brand, that is already present in the neighbouring vicinity of the country, for example in Albania, Bulgaria, Serbia but probably through a buyout of a smaller, already present, local brand with 7-8 locations. Chances are that a larger entry would not likely establish its presence trough building a network of new locations from scratch" - says Mr.Bogoevski.