Local, international and regional chains are vying for market share in the Balkans’ fast-growing food retail market. 

As bne IntelliNews has reported, consumer markets in Southeast Europe are booming, in what is largely a catch-up story. As their populations gradually become more affluent, they are driving the kind of growth in retail and other consumer-oriented sectors seen in Central Europe a decade or so ago. 

Romania, as the biggest country by far in terms of population and GDP, has long been home to International food retail chains. German retailers Lidl and Kaufland are the largest by market share, but other such as Delhaize Group’s Mega Image and France’s Auchan and Carrefour also have a presence. 

Among the other countries in the region, the next in size by population are Bulgaria and Serbia. Slovenia has a tiny population of just over 2mn but is the most affluent country in the region. At the other end of the scale, there are the relatively poor and very small markets such as Kosovo (1.8mn) and Montenegro (617,000). 

However, spending power is steadily growing leading retailers to seek opportunities even in smaller markets. 

Retailers in some countries also benefit from a bump in the summer months when millions of tourists descend on the Adriatic and Black Sea coasts. In both Croatia and Albania, tourism accounts, directly and indirectly, for around a quarter of GDP. 

After pan-European players initially came to Romania, they are now making inroads elsewhere. 

Already established in larger markets, Lidl in particular is now targeting the smaller markets in the region. 

There is clearly an appetite for the German retailer; a bne IntelliNews story reported that day trips to the Lidl store in Serbia’s Vranje had become popular in neighbouring North Macedonia. 

Now North Macedonia is getting its own Lidl stores. Lidl started its expansion back in February 2021 with the establishment of its corporate entity in the country. The retail giant later confirmed its plans for a flagship store in Skopje.

It was also reported earlier this year that Lidl started construction of its first store in Bosnia & Herzegovina in March. The store will be located in the capital Sarajevo. 

Local champions

There are also successful home grown chains in the region, some of which have attracted the interest of private equity investors. 

In October 2023, Ahold Delhaize announced it agreed to buy Romania's Profi chain from private equity firm MidEuropa for €1.3bn. The deal was the largest exit by a private equity fund in the food segment in Central and Eastern Europe.

At the time, Profi operated the most extensive retail chain in Romania in terms of outlets and was the third-largest retailer in the country by turnover after Lidl and Kaufland. Its network numbered more than 1,650 stores.

Delhaize’s existing chain Mega Image was the sixth-largest player by turnover. Delhaize said it will add Profi to its family of brands, meaning there will be no integration of the two chains. "Romania is an attractive market, with a development supported by solid investments,” the company said on announcing the deal. 

Also in Romania, as reported by bne IntelliNews’ Romanian correspondent, hypermarket chain La Cocos is expanding in market dominated by foreign players. 

Earlier this year, La Cocos has announced the opening of its fourth store, in the central Romanian city of Brasov, in the first step of an expansion plan that includes the launch of five more units in 2024 and 2025.

La Cocos is a new concept in the Romanian market, a retail format which offers three price levels to its customers, depending on the quantity purchased. Before opening the store in Brasov, La Cocos was operating three hypermarkets – two in Ploiesti and one in Bucharest.

Another significant regional player in the area is Slovenia-based Mercator, owned by Croatia’s Fortenova Group. Mercator operates not only in Slovenia but also in Bosnia, Croatia, Montenegro and Serbia.

In 2023, Mercator signed a deal to acquire the shares of Engrotus, which operates about 260 Tus stores nationwide. The acquisition did not include the 43 Tus drugstores. Fortenova said at the time that the deal would create a major retail force in Slovenia.

Croatian retailer Studenac – like Profi with private equity backing – has been on an acquisition spree, growing from a local player in the coastal region of Dalmatia to a nationwide chain in just a few years after being acquired by Enterprise Investors in 2018. 

Today the company is Croatia’s largest retailer by number of stores with a total of 1,265 across the country as of the end of 2023. It aims to become one of the top three Croatian retail networks by sales within the next three years, and grow its market share to over 12% through a combination of organic growth and more acquisitions. 

Studenac stands out from other Croatian grocery retail chains because of its proximity format; the company predominantly services a small basket of everyday shopping. Around 60% of Student’ stores have a sales area of between 60 and 180 square metres, and the average network size is around 120 square metres.

Croatia’s retail market has followed a similar path to others in the region. Currently somewhat fragmented, there is a visible trend of consolidation in the sector. “The Croatian retail market is still quite fragmented. It is ripe for consolidation, but the process is only just getting under way, and it will continue for years to come,” Michał Seńczuk, CEO of Studenac, told bne IntelliNews in an interview. 

In the latest development, Studenac said in a press release on June 26 that it to acquire 36 Decentia stores as its continues its strategy of expanding through acquisitions. The transaction requires regulatory approval from the Croatian Competition Agency (AZTN).

“If completed, the acquisition will strengthen Studenac’s position in continental Croatia, particularly Zagreb, where it will reach more than 130 stores,” the company said. 

Earlier in June Studenac announced plans to open a new distribution centre near Zagreb next year, a move set to create around 500 jobs, the company said in a press release on June 18.

A loan from the European Bank for Reconstruction and Development (EBRD) is supporting Student’s expansion. The EBRD has also backed other retailers in the region including Proex, operator of the Interex branded stores in Kosovo and Bosnian retailer Bingo.

Regional players

As well as the pan-European retailers and their local competitors, chains from the southeast and eastern part of Europe are also eyeing the Balkans.  

Greek retail group Veropoulos is expanding its presence in North Macedonia with future plans including the opening a combined Vero Market and Jumbo store in the city of Strumica in 2024, the Skopje branch announced in November 2023.

The company, which is celebrating its 25th anniversary in North Macedonia this year plans to further expand to other cities across the country in the coming years.

It is also active in Serbia, where it opened its new Super Vero and hypermarket and big box Jumbo family and home store in Novi Sad in December 2023.

Another Greek company, Retail & More AE, which holds the Balkan franchise for Carrefour Group, also plans to expand and acquire businesses in the Balkans, according to Retail Serbia.

Sources quoted by Retail Serbia indicate that the company is looking at acquisitions across the Balkans, with a particular focus on small and medium-sized retailers. 

Russian retail chain Mere is planning to open its first megamarket in Serbia, according to a report by local news portal Resetka in May 2024. This move marks Mere's latest expansion in Serbia, where it has already established a presence with over 60 retail outlets since entering the market about 3.5 years ago. 

The initial megamarket in Leskovac will span 1,120 square metres, making it the first mega Mere store in Serbia.

Meanwhile, German grocery chain Mix Markt has expanded into Serbia with three stores, two located in Belgrade and one in Novi Sad, European Supermarket Magazine (ESM) reported in May. 

Mix Markt specialises in Eastern European products sourced from countries like Russia, Ukraine, Georgia, the Baltics, Poland, Turkey and the Balkans. 

Mix Markt already operates in Montenegro, Bulgaria and Slovenia, and has a total of 181 stores across Germany and Europe. 

Poland’s Zabka Group, the operator of the country’s largest chain of convenience shops, bought the majority stake in Romanian food products distributor DRIM Daniel Distributie in March 2024 as part of its strategy for international expansion. 

It said the prospects of the Romanian market and the profile of the Romanian consumer – which is similar to the Polish shopper, Zabka says – make Romania a natural geographical direction for expansion.