Officially, Konzum’s sales are down 12-13%. Unofficially, much more.
The latest data has confirmed that Croatian citizens are spending more in shops this year. The retail turnover in the first three months was nominally 5.8 percent higher than last year, while calendar adjusted data suggests an increase of 7.9 percent nominally and 5.8 percent in real terms, reports Poslovni.hr on May 15, 2017.
However, such high annual growth rates are not a result of increased spending in supermarkets, which are officially called “non-specialised stores with predominantly food products.” That sector participates in more than 36 percent in the total consumption, but in the first quarter it recorded a nominal increase of just 0.9 percent. However, Agrokor, the biggest player in the Croatian retail market, has recorded a drop in sales due to the financing crisis, which means that its competitors have profited from its problems.
Lidl, Kaufland, Spar and Metro mostly do not want to discuss their rates of growth in sales and market shares, the number of new suppliers or the expansion of cooperation with the existing ones. The only available data is from Metro Cash & Carry Croatia. “For the second consecutive year, our company has achieved double-digit sales growth in the HoReCa segment, and the trend continued in the period from January to April this year with about a 15 percent increase,” said Metro, adding that the company cooperates with 95 percent of all restaurants and hotels in Croatia. “According to the data we have, Metro meets one fifth of the needs of all HoReCa customers in Croatia,” they said.
Unofficial estimates are that other Konzum's retail competitors have also been recording double-digit growth. The average growth might be around ten percent. Unofficial sources speculate that Konzum’s turnover might have fallen by as much as 20 percent due to the problems with liquidity and disruptions of the supply chain, but Agrokor's commissioner Ante Ramljak said recently that the decline in the first four months was 12-13 percent.
If it is to be judged on the basis of claims made by Croatian food companies about pressures that they are allegedly being exposed to from foreign trade chains, it seems that the new round of financing for Akrogor should be secured as soon as possible. Foreign chains are aware that many of these companies cannot substitute their sales (in terms of quantity and number of products) that they had through Konzum. Allegedly, they are also trying to shift some of the costs of aggressive marketing campaigns, which recently put a major emphasis on Croatian products. Of course, the goal is a long-term takeover of Konzum’s customers.
Some Croatian food companies have problems due to the issue of the Russian embargo, which means that there is a surplus on products on the EU markets (especially dairy and meat). Many of them also have problems in coming to an agreement with Lidl, Kaufland or Spar about selling most of their product range, as was the case until recently with Konzum, given that foreign retail chains are only interested in a fifth or a fourth of their products.
Spar, which in April took over Billa and increased the number of outlets, did not want to discuss the numbers. However, they do point out that several days ago, together with Zvečevo, they created five types of Spar chocolates and that there are “more and more Croatian companies producing their brands.” They also say that the only criterion for a position in their stores is quality, and that there are no exclusivity demands from their side.
Metro also emphasises “the continuous expansion of business cooperation with Croatian suppliers which is part of the strategy. Currently, 60 percent of our product range is made up of products made by Croatian suppliers, while more than 50 Croatian producers involved in the Metro brand programme. Their products are located on the shelves of the Metro Cash & Carry wholesale stores in 15 countries around the world, from China, Moldova and Poland to Germany and France,” says the company, adding that they pay particular attention to family farms and small and medium-sized businesses.
As for Konzum, the tourist season could be crucial, given that in previous years it has brought in huge amounts of revenue, said Drago Munjize, a consultant who worked in Agrokor’s management many years ago. “Competitors are getting ready, and therefore whether or not Konzum will get the money in time is of importance. In that case, since it has good technology and knowledge, it has a chance to regain part of the market share,” said Munjiza.
