The Secretary General of the National Trade Association spoke about the expansion of the Russian Mere in Hungary
Many people were surprised that, according to a news from early April, the Siberian Mere store chain would open 200 stores in Hungary in three years, for which it is already looking for suppliers. The company promises that they will be 20-30 percent cheaper even than Aldi and Lidl, but in return they offer a relatively small selection in the store, which customers should not take off the shelves, but directly from the pallets.
“The essence of the business model is that they would give a 20 percent price advantage compared to discounters. Considering that the average level of the margin in retail does not reach 20 percent, the big question is how to ensure sustainable profitability in the longer term.”
– said Tamás Kozák, the Secretary General of the National Trade Association, to 444 about the expansion of the Russian Mere in Hungary.
In the leaked letter, Mere wrote: within three years, they expect a turnover of 700 million euros, i.e. approximately 270 billion HUF. With this, they would have about 5 percent of the Hungarian retail market, which, according to Kozák, entails a very high financial risk. According to him, however, “this requires a very strong expansion, it is almost impossible with a green field investment, although I do not have the philosopher’s stone”.
444 spoke to a manager of one of the retail chains operating in Hungary, who also thinks that the 700 million euros in sales achieved in three years by opening new stores is not realistic.
Related news
We know where Mere will open its first Hungarian store
The Russian Mere department store chain will soon open its…
Read more >The National Trade Association welcomes the elimination of mandatory promotions from July 1
The National Trade Association welcomes the elimination of mandatory promotions…
Read more >This year’s Russian grain harvest could be the lowest since 2021
This year’s Russian grain harvest may be the lowest since…
Read more >Related news
The Hungarian Marketing Association for the supply of the profession
The Hungarian Marketing Association is actively working for the future…
Read more >Tetra Pak has announced that Alex Henriksen will be the managing director of the Eastern European region
Tetra Pak, one of the world’s leading food processing and…
Read more >Coca-Cola Hungary has developed new educational modules on waste circulation
After the online curriculum on the basics of the circular…
Read more >