The Secretary General of the National Trade Association spoke about the expansion of the Russian Mere in Hungary

By: Trademagazin Date: 2024. 04. 05. 12:12

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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.