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Strategies for Success in Central & Eastern Europe

Strategies for Success in Central & Eastern Europe. By Miloš Ryba, CEE Retail Analyst. Planet Retail Ltd | April 2010.

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Strategies for Success in Central & Eastern Europe

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  1. Strategies for Success inCentral & Eastern Europe By Miloš Ryba, CEE Retail Analyst Planet Retail Ltd | April 2010

  2. The Central and Eastern European retail market has diversified over the last 15 years. Therefore, expansion in different parts of this region requires different business strategies. • To be successful in Central and Eastern Europe each market must be approached on an individual basis – one-size-fits-all strategies are unlikely to be successful. • To build up a brand presence in major cities, manufacturers should focus on the hypermarket and discount channels. In Eastern Europe, the hypermarket channel has the most potential in the short to medium term. • Rural markets are far less developed throughout Central and Eastern Europe, although this is rapidly changing in Central Europe. The key route to entry is through cash & carry and retail associations but there are limitations due to the weak supply chain structure, especially in Eastern Europe. • Getting your brands in early is a great opportunity as private label penetration is still low. However, Central Europe is now seeing stronger own label development. • Foreign retailers will become market leaders in Central Europe. But, in some markets, particularly Eastern Europe and the Western Balkans, domestic players are currently winning the battle against most Western European rivals.

  3. Contents • Central Europe • Strategies for success in Central Europe • Eastern Europe • Strategies for success in Eastern Europe • Implications

  4. 1. Central Europe

  5. 1. Central Europe Overview Retail market consolidation is higher in more economically developed countries. • The Central European market is diverse with many countries showing varying characteristics in terms of retail development. • Retail consolidation is more prevalent in the Czech Republic, Slovakia and Slovenia. • However, small markets such as Estonia and Lithuania are fairly concentrated as a result of the strong position of domestic retailers. • The Polish retail market remains relatively fragmented due to the large number of medium-sized retailers, while others are not consolidated yet, like Bulgaria, due to the lack of modern grocery formats. Sweden Finland Norway Estonia Russia Latvia Denmark UnitedKingdom Lithuania Ireland Belarus Netherlands Poland Germany Belgium Czech Rep Luxembourg Ukraine Slovakia Austria Hungary Switzerland Moldova Slovenia France Romania Croatia Bosnia & Herzegovina Italy Serbia Bulgaria FYRO Macedonia Albania Spain Portugal Greece Cyprus Market share of Top 5 grocery retailers up to 30% Market share of Top 5 grocery retailers 30% - 60% Market share of Top 5 grocery retailers over 60%

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