► Food trade, one of the most important markets in the economy, is dominated by several large, international chains, which operate 4,500 hypermarkets, supermarkets, discount stores, modern convenience stores and cash & carry ► They are joined by several hundred local chains regional times and about 50,000 small independent merchants ► In total, Romanians leave in these physical stores, but in online, 27-30 billion. euros annually. 1. The transaction by which the owner of Mega Image takes over Profi received the OK from the Competition
The transaction through which the Ahold Delhaize group, the owner of Mega Image in Romania, bought Profi, which recently received the conditional approval of the Competition Council, changes the face of the local food trade. More precisely, it makes the market valued at a step of 30 billion. euro to concentrate even more strongly at the top. That is precisely why the Competition Council authorized the conditional takeover of Profi by Ahold Delhaize, citing that otherwise the Dutch-Belgian group could end up having too much power in the relationship with suppliers and consumers. In this context, the new owner of Profi will have to sell 87 of the stores and also has to fulfill a series of commitments in the relationship with suppliers. Last year, the two local networks (Profi and Mega Image) gathered business of 22.8 billion. lei, i.e. 20.5% of all modern trade and over 15% of all Romanian food trade. In terms of number of stores, they have almost 2,700 supermarkets and convenience stores, i.e. 60% of the modern trade universe. 2. Carrefour finishes integrating the Cora network The Cora brand disappeared permanently from Romania after the French from Carrefour put their logo on local stores. This name change and, moreover, this rebranding process are part of a move that targets the entire Cora network in Romania and actually marks the exit of the local retailer. The French from Carrefour took over the Cora operations in Romania in 2023, and after the hill received the approval of the Competition Council in 2024, they started integrating the stores. It is about ten hypermarkets and nine proximity units that were purchased. However, Carrefour closed four convenience stores out of the nine, and the rest of the network was integrated, which means the disappearance of the Cora brand from Romania. The company entered the domestic market in 2003 and expanded cautiously, at the best time reaching 12 hypermarkets, according to ZF data. This fact caused the retailer to remain the lowest in terms of turnover and the least expanded in all these years that followed. Cora closed the year 2023 with business of 1.38 billion. lei (under 300 million euros), 8.5% lower than in 2022, being the only modern retailer in the red.
The first discussions regarding the sale of local operations appeared in 2018, but they did not materialize until 2023. 3. A new player is making its way into modern commerce The Polish Zabka group, present on the parent market with a network of over 10,000 stores, entered the local food retail market less than eight months ago, when it opened its first unit. After the first month, the local network had reached five stores, but since then the group has accelerated its development and has already exceeded 50 units. It's about modern convenience stores. Froo stores, the brand that Zabka uses in Romania, have, on average, 50-70 square meters. They mainly sell products for immediate consumption, the target being the young customer from the urban environment. Thus, the retailer enters the «battle» field of Profi, Mega Image (with the Shop&GO concept), Carrefour Express and LaDoiPaşi. 4. The largest local retailer is on the radar of investment funds The European Bank for Reconstruction and Development (EBRD) and the private equity funds CEECAT Capital Fund and Morphosis Capital Fund II invested at the end of the summer 30-35 mil. euro to take over 56% of the shares of the strongest entrepreneurial business in the food trade, La Cocoş, ZF estimates show. These estimates are based on the fact that the EBRD announced that it invested 10 mil. euro in this hill, while the average ticket of Morphosis (from the second fund) varies between 7 and 12 mil. euros, according to the previously transmitted data. The three investors, together with the founders of the business, Iulian and Gianina Nica, want to transform La Cocoş into a «unicorn». More precisely, the retailer now has a turnover of 200 mil. euro, and the target is to reach 1 billion by 2029. euro. The money will be used for the expansion of the network, which currently has three units. In the coming years, the chain would reach more than 10 hypermarkets with low prices. La Cocoş is a relatively young entrepreneurial business, the first store in Ploiesti being opened a decade ago, in Ploiesti. Then, after the initial business reached its maximum size, Iulian Nica replicated the model in Bucharest, the most competitive retail market in Romania, but also the largest. Last year, the third La Cocoş store was inaugurated, also in Ploiesti. And the company's plans do not stop here, the founder wanting a national expansion. Therefore, the money injected into the business by EBRD, CEECAT and Morphosis will be used for development. 5. Three new top managers Three of the players in the local modern trade changed their CEO in 2024, they are Lidl, Carrefour and Metro. The German discounter Lidl, the leader of the local trade in terms of turnover, appointed the Spanish José Alberto Chueca Val to head the local operations. He replaces Marco Giudici, another expat who takes up a position at group level, starting this autumn. For his part, the French executive Gilles Ballot took over at the beginning of 2024 the management of the operations in Romania of the Carrefour group, replacing at the helm of the 450 stores under several formats another expat from Hexagon, Julien Munch. He thus becomes the eighth expat to hold the position of CEO of Carrefour Romania, a business worth around 3.5 billion. euros annually. And the German group METRO appointed an expat, Karan Khurana, to head the local business, with sales of over 10 billion. lei last year. He thus replaces the Romanian Adrian Ariciu, who took a regional position, that of executive vice-president for Eastern Europe at METRO AG. 6. Bet on the franchise The French groups Carrefour and Auchan are betting on the franchise model in an attempt to better cover the country and gain market share in the fight with other international chains, but also with domestic chains. Regarding the expansion from 2025, Ionuţ Ardeleanu, CEO of Auchan, recently said that the group is betting on both discount and franchise. This year, the first franchise units were opened under the Simply by Auchan brand, and next year could be the time for the MyAuchan ones. The first is a soft franchise, which allows partners to adapt their model, while the second is what is called a hard franchise, where sourcing is done from Auchan. With these stores, the retailer also wants to enter the countryside. Similarly, the French group Carrefour, present locally with around 450 stores under multiple formats, is accelerating development in the franchise system in Romania, aiming to reach over 100 units operated by partners in the near future, compared to 33 today. 7. Inflation remains far from the ideal level of 2% In 2024, Romania continued to be one of the «champion» countries when it comes to inflation, with prices increasing by more than 5% in November 2024 versus the same month of the previous year. Although the price increases have softened compared to the peak period (end of 2022 and beginning of 2023), when inflation jumped by 15%, prices continued their upward trend, both for food and non-food goods and services. If in the first part of the year there were voices stating that there is already deflation in the food trade, recent INS data show that it was only a short-lived period. Thus, in November, the annual inflation for bread and other bakery goods was 2.93%, for vegetables it was 10%, while for meat it was close to 4%. 8. METRO «attacks» Bucharest with LaDoiPaşi Extra stores The German group METRO, one of the most powerful players in Romanian trade in terms of turnover, continues to bet on the proximity format and in 2024 launched a LaDoiPaşi concept dedicated to the urban area. Thus, LaDoiPaşi Extra stores enter the fight with concepts of other retailers such as Mega Image (Shop&Go units), Froo (Polish brand from Zabka), Profi or Carrefour (Market format). METRO's decision to launch a concept for the urban area, led by Bucharest, comes in the context where the Capital is the strongest retail market, with consumers in the city having a much higher purchasing power than average. At the same time, the inhabitants of Bucharest are more and more oriented towards certain formats, namely modern proximity and discount. Under these conditions, METRO launched LaDoiPaşi Extra. In the summer there were 30 LaDoiPaşi Extra stores, but now there are 16 units in Bucharest on its own website. Located in dense urban areas, LaDoiPaşi Extra stores have surfaces between 60 and 200 square meters and offer food and non-food products, with a focus on ready-to-eat, ready-to-go, ready-to-cook solutions. 9. The fashion for offers and discounts is back Promotions have recently come to be the buzzword in food-dominant retail, and this at a time when consumers show caution when shopping, and merchants are looking for various methods to bring them to stores and make them spend money. Under these conditions, almost a quarter of the sales of consumer goods are represented by «on offer», «discount» or «promotion» products. More precisely, the share of promotions in total FMCG retail sales (minus fresh products, such as fruits and vegetables) reached 23.3% in the first semester of 2024, up by almost two percentage points compared to the previous six months, shows GfK Consumer Panel Services data. In fact, this market share has been continuously increasing since the second semester of 2022, a period when inflation had reached maximum levels, and Romanians had begun to feel their purchasing power affected. For comparison, in the first part of 2022, the market share of promotions was only 17.2%, a minimum of the last five years at least. 10. A new trade segment is regaining shape – the Romanian wholesalers In the 1990s, Romanian commerce was clearly dominated by local stores, operated by domestic entrepreneurs who had started after communism to offer a variety of products to a market that was hungry for food and non-food goods. Some of these shops were already traditional kiosks, while others were wholesalers. With the arrival of the big international players – led by Metro in 1996, the market changed and tens of thousands of local operators pulled the shutters. The development of the Metro and Selgros cash&carry networks first led to the disappearance of traditional wholesalers, who saw how their customers migrated to these modern stores. Today, however, slowly but surely, such businesses have appeared again or returned to the foreground. Moreover, some make their place in the top of the most dynamic businesses in local commerce. This is the case of Ability Trade SRL from Brăila, Geolaila Comimpex SRL from Bucharest, Decenu Noi Retail SRL from Ilfov, DCN EU Cash&Carry from the same county and Lucidus SRL from Bucharest. This is not a top and it is not exhaustive. NV has selected five companies that it knows operate on this format, but in reality there are more.
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