Market News

Jeronimo Martins enters Central Europe

Biedronka will enter Romanian market and Hebe will open its first stores in the Czech Republic and Slovakia, announced Pedro Soares dos Santos, CEO of Jeronimo Martins group. This is another of the company’s moves showing that the potential for further development of current formats on the Polish market is running out.

Biedronka leads grocery market in Poland with a share of 19% (according to PMR data). Retailer operates 3,002 stores in discount format in the country. However, for some time now, the chain has been looking for new ways of development: it opens stores in supermarket format (with service from behind the counter in selected categories of fresh products), as well as in proximity format – stores with a smaller area, intended for rural areas and smaller towns. Moreover, the latter format is available to franchisees. However, that does not change the fact that the Polish food market is increasingly saturated. Therefore, in order to maintain the high growth rate (7.9% y/y in 2019), entering foreign markets may be a necessity.

According to the company, Biedronka would start its expansion in Romania within two or three years. The network does not intend to build its position from scratch, but rather to take over the existing chain. A few years ago, Biedronka was already interested in buying Profi when the Enterprise Investors fund put it up for sale. Ultimately, the purchase was made by another fund – Mid Europa Partners. It is possible that Profi will eventually go to Biedronka anyway, because there are not many large chains on Romanian market that would fit Biedronka’s business model in terms of shop size. Apart from Profi, there are discount chains belonging to international giants such as Lidl and REWE Group, which rather do not plan to sell their shops, and supermarkets of the Mega Image chain (belonging to the Belgian Delhaize Group). On the other hand, the local Annabella and Unicarm chains have only a few dozen stores each, so their acquisition would not give Jeronimo Martins a significant market share.

Hebe also looks for a place to develop

With cosmetics chains on the Polish cosmetics market is similar to discounters on grocery market. It is a very popular and already very saturated format with a very strong market leader. However, in this case, it is not a chain belonging to Jeronimo Martins, but a German-based. Thus, Hebe plans to look for a place to develop further beyond our southern border. The choice of the Czech Republic and Slovakia seems surprising, because we can speak of a lot of competition in both these markets. The Rossmann chain and dm drogerie markt are present on the Czech market and the local player Teta has a very strong position. In addition to dm drogerie markt and Teta, 101 Drogerie and Tevos are also present on the Slovak market.

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