Agrokor is Retail Leader in the Adria Region
Dec 01, 2010
With €2.67 billion consolidated sales recorded by its retail chains Konzum and Idea Agrokor has become the biggest retail group in the Adria region and ranked as leader in Deloitte’s 2009 Regional Analysis of the Retail Trade Sector.
Agrokor earned the highest ranking through business results achieved in 2009 by Konzum in Croatia and Bosnia and Herzegovina, Tisak, the Serbian Idea and the Bosnian TPDC. Mercator came second with a consolidated income of €2.64 billion. The Serbian retail chain Delta Maxi came third in the Adria region with the 2009 total of a little more than €1 billion. With an annual turnover in Croatia exceeding €1.54 billion Konzum is the 2009 retail leader in Croatia. In the Croatian market Plodine and Metro Cash & Carry came second and third and are followed by Mercator – H and Kaufland. In addition to being a leader in Croatia thanks to its 2009 net sales, with its 220,281 sq m of retail floor area and 682 stores Konzum is a leader in that regard in the Croatian market, followed by Mercator-H and Plodine. "Retail Trade Index value, often used as consumer trust indicator, has been positive since July 2010 for the fist time after a longer period", says Slaven Ćurić, manager at Deloitte. The ownership structure of the biggest retail chains shows that half of the retail chains ranked among Top 10 in the Adria region are owned by regionally-based companies and after the acquisition of the Emmezeta retail chain in Croatia by Spar, the other half is now owned by German or Austrian companies. Davor Tolić, Research Manager at Ipsos Puls, has drawn the attention on the increase of supermarket share of retail sales over small neighbourhood stores consumers used to buy their groceries at on a daily bases. "Only 13 percent of people in Croatia buy their groceries on a daily basis (up to HRK 200) in their local stores, while almost 22 percent buy at Konzum. Some 24 percent consumers do their weekly grocery shopping at Konzum and 15 percent of people participating in this survey buy over HRK 200 worth of groceries at Kaufland", says Tolić.
"By entering the market discount retailers speeded up the trend of customer polarization. The number of consumers that regard price as the most important criterion when choosing a product or shopping location is increasing and they are clearly different from the buyers choosing products from a higher price range. The polarization trend in Croatia has been recognized by the major retail players in the region as well. Mercator recently presented new Getro stores targeting low income customers and Delta Maxi Group has Tempo for people with lower purchasing power. Konzum took a different approach in addressing the polarization issue by launching several different store brands (K+, Rial, Standard)", explains Slaven Ćurić, manager at Deloitte. "In Croatia about 39 percent consumers buy store brands, and more than half (57 percent) believe that they have the same quality as name-brand items. However, 39 percent of survey participants perceive store brand products to be of a lesser quality" emphasizes Davor Tolić. A survey conducted by Ipsos Puls showed that the most popular store brands sold at Croatian retail chains are K-Plus, Clever, Standard, Rial and Mercator, with Konzum’s store brand K-Plus being the most popular with Croatian consumers. A majority of the biggest retail chains in the Adria region do not have Internet sales. Even the retail chains that do have Internet sales do not have that service available in all of their markets. For example, consumers can buy at Konzum online, but only in Croatia and Bosnia and Herzegovina, and Mercator offers Internet sales only in Slovenia and Croatia. Similar to that, only half the major players in the region have customer loyalty programs. Mercator (with 1.5 million loyalty-card users), Konzum, Tuš, Metro CC and Billa are the ones with best developed loyalty-card schemes.