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Slovenia Business Week no. 13: New Discount Chain Enters Slovenian Market

German discount chain Lidl opened on 29 March 15 stores throughout Slovenia, becoming the sixth discount chain on the Slovenian market

German discount chain Lidl opened on Thursday, 29 March 15 stores throughout Slovenia, becoming the sixth discount chain on the Slovenian market. Lidl will capture a 10% share of the market in the next three years, as it is very ambitious in terms of expansion and advertising, so the share can be increased to 15% and more, according to a survey by Gral Iteo, a market research company.

Lidl will join foreign discount chains Hofer and Eurospin, and Slovenia's Hardi, Plus and Hura. The company announced intensive expansion of its sales network, and is to soon open another ten stores, according to Gregor Kosi, the director of sales of Lidl's Slovenian subsidiary.

The company was reluctant to reveal what market share Lidl could take. "We are yet to convince Slovenian shoppers," Kosi said on Tuesday, 27 March, adding that the company's biggest competitive advantage was fresh fruit and vegetables.

The share of the market occupied by discount chains increased from 3% in 2005 to almost 5% in 2006. "It is an average figure from the aspect of total sales of consumer goods, while considerably higher shares can be reached within individual product groups," Gral Iteo has told STA.

The biggest market share among discount chains is held by Hofer (2.1%), which is planning to have 80 stores in Slovenia by the end of 2009. Other discount retailers each hold less than 1% of the market.

More than 80% of the Slovenian grocery market is currently held by the three biggest retailers, Mercator (45.8%), Spar (20.5%) and Tus (16.4%).

A Gral Iteo survey of November 2006 shows that discount stores only attract consumers whose main guideline in making their purchases is the price, and those who are not ready to spend much money on consumer goods although they can afford it.

Source: Slovenian Press Agency STA

Author: STA, Slovenian National Press Agency