Skip to main content
 

Trends And Future Of Bulgaria's Retail Market

The list of hypermarkets, supermarkets, outlets, food and home appliances chains in Bulgaria is growing constantly. Petar Kostadinov examines the trends and the future of the market.The main players in the retail market have ambitious plans for 2007 and beyond. Competition is fierce, and although Bulgaria has less than eight million inhabitants, the race for their money has started.Electronic retailersThere are two major trends in this segment of the electronic retail market. The first is the arrival of foreign investors who prefer to buy stakes in already existing and profitable local companies. The second is the search for new opportunities for development, mainly aimed at expansion abroad into neighbouring countries or moving to another segment of the market.The story of the current leader, Technomarket, is evidence that a good performance attracts foreign investors which, in turn, leads to plans to expand on both the domestic and foreign markets.Technomarket was established in the early 1990s by the Bulgarian company K&K Electronics. A few weeks ago, Equest Balkan Properties, the real estate investment fund of UK-registered Equest Capital Management, bought a 51 per cent stake in Lynx Property, owner of Technomarket. The acquisition is valued at nearly 61 million euro. Technomarket currently operates 22 retail outlets across the country and holds about a 40 per cent share of the local market. The company has recently launched a joint-trade project with Equest in Serbia. Although this is not Technomarket's first project abroad, the joint project with Equest will add substantial power to the company's performance on the Balkans.In 2005, Technomarket reported sales of 258 million euro, and for the first six months of 2006 the company reported sales of 144 million euro. Although the company has not yet revealed details of its development plans, the Serbia project suggests that Technomarket has reached its limit in Bulgaria and intends to pursue profits in neighbouring countries.Technopolis Bulgaria is next in line. The company, set up in 2002, currently runs one of the leading specialty retail chains for consumer electronics, home office products, entertainment software, appliances and related services in Bulgaria. Technopolis is concentrating on heavily-populated locations in the country's largest cities. As of October 2006, Technopolis, a joint venture by Bulgarian company Videolux and Germany's Lindner, has 11 mega stores throughout Bulgaria: two in Sofia and the rest in Plovdiv, Varna, Rousse, Bourgas, Stara Zagora, Pleven, Vratsa, Shoumen and Sliven. The total amount of investment so far is 39 million euro, 7.8 million euro of which were invested in 2006. This November, the company showed an appetite for a bite into the "big cake" - hypermarkets. Technopolis appears poised for further expansion and reorganisation. It appears that, in the case of Technopolis, the limit in small-scale electronic retailing has been reached. Through its plans to invest in hypermarkets, the company wants to cover all segments of the retail market. Technopolis plans to invest 20 million leva in 2007 to build four hypermarkets across Bulgaria. The company also plans to build a large logistics centre near Sofia. Technopolis has also bought land for two more units, which suggests even further development. According to the company, its share of the white and brown goods markets was 30 per cent and between 15 per cent and 20 per cent for the IT segment. However, Technopolis is not staking everything on hypermarkets. It has plans for new outlets in the cities of Blagoevgrad, Dobrich, Haskovo and Pazardjik.

 

Another Bulgarian electronic retail chain, Zora, plans to open at least one electronics hypermarket by the end of 2006. Sofia is first priority, followed by one of the other major cities. According to Zora, sales for 2006 add up so far to 60 million euro. Its target for 2007 is to open at least five or six outlets, some in the larger shopping malls. Through this move, Zora has made it clear that will closely follow the two leaders, Technomarket and Technopolis.Zora-M.M.S. was established in 1991, as a retail home appliances and consumer electronics chain. Last week, Zora's economic director Galya Nikolova told a news conference that the company planned to invest up to 5.1 million euro in opening new stores next year. At present, Zora has 15 outlets in Sofia and 15 more in the rest of the country and claims to cover 25 per cent of the market. Evidence that Zora has high ambitions is its plan to enter a foreign market in the next two years. Nikolova said that this would not be neighbouring Macedonia, Serbia or Kosovo, which will mean that Technomarket will remain the only Bulgarian retail chain operating in Serbia.At the end of the line is Technocenter Elite. Although it is too small to be compared with the three leaders in the sector, Technocenter Elite is emerging as the pretender from the little league. The company has four electronic stores outlets in Sofia, Plovdiv, Blagoevgrad and Rousse. Last month it was reported that Technocenter Elite will open a fifth outlet in the town of Targovishte, with the small town of Gotse Delchev on the "possible" list.The company was established six years ago and its main distinction from the others is that it offers only products manufactured by Bulgarian electronic appliances firm Elite, which may be the reason why Technocenter Elite lags behind the three leaders.The other pretender, local electronic retailer Densi, was established in 1993. Today it has three outlets under the name Technohit in Sofia. In early November, it was reported that Densi would join forces with Austria's Billa to launch a hypermarket in Stara Zagora by the end of 2006. The company currently is taking part in the construction of the Central Mall of Veliko Turnovo. A hint of Densi's serious investment plans was the announcement of the company's intention to put 120 million euro into building three malls across the country. Rousse, on the Danube, the Black Sea city of Varna and the northern town of Pleven are Densi's targets. If achieved, this investment alone will place Densi among the leaders in the segment.

 
sofiaecho.com