Retail Focus | the Baltics

The international marketing magazine for fresh produce buyers in Europe By Steven Maxwell Friday 5th February 2010, 8:36 GMT Retail Focus | The Baltics Fruitnet.com takes an in-depth look at the rapid development of the retail market in Estonia, Latvia and Lithuania he three Baltic states that sit in the country, giving it a share of over 36 Figures provided by Planet Retail show T between Russia and Belarus to per cent in the Lithuanian grocery retail that total grocery retail sales in the country the east and Poland to the south market. A similar picture is repeated in dropped to €4.6m last year, from €5.4m in have experienced some two decades of nearby Latvia, where Maxima has 128 stores 2008. rapid development since their with a 10.6 per cent market share, and independence from the former Soviet Estonia where the retailer operates 74 A similar pattern could be seen, albeit to a Union, emerging with modern grocery outlets with a 16 per cent share of the lesser extent in the neighbouring Baltic retail sectors. The growth of the sectors in market. republics of Estonia and Latvia, where 2009 the Baltics has been clearly influenced by grocery retail sales totalled €2.3m and €2.8m the countries’ cultural ties, and But, while Lithuania has by far the most respectively, from €2.6m and €3.4m a year geographical vicinity, to Scandinavia, developed economy in the region, it has before. although Lithuanian retail group Maxima been no less affected by the global The affects of the downturn could be has established itself as the market leader economic recession. clearly seen in the results of the only across the region. Although the country’s gross domestic foreign-owned player in the sector, Ahold’s Although one of the smallest countries in product has increased steadily over the last Rimi Baltic chain, which is operated eastern Europe, Lithuania is the largest decade, growth abruptly slowed to a halt in through its Swedish subsidiary, Ica. Rimi nation in the Baltic region by population 2008, before Lithuania slipped into Baltic, which holds a 16 per cent share of and, with the exception of Estonia, the recession last year. According to Planet the Estonian market although it only has most developed of the three nations. Retail, the first signs of recovery are not stakes of 10.5 per cent and 7 per cent in the expected until 2011. Latvian and Lithuanian equivalents, ended According to market analyst Planet Retail, 2009 with a 19.3 per cent sales decrease in the top five retailers in Lithuania account Evidence of the affect the recession has had December. for around 60 per cent of the overall on consumer spending in the country, market, principally due to the domestic where some 50 per cent of retail sales are In the subsidiary’s strongest market, dominance of Maxima, which itself generated through food sales, can be easily Estonia, where it operates 78 stores, sales controls an estimated 35 per cent share of found in the form of a slump in Lithuanian fell by almost 13 per cent compared with the sector. grocery retail sales over the last 12 months. December 2008, while in Lithuania sales slumped by just over 22 per cent. For the http://www.fruitnet.com/americafruit/article/1474/parts-of-san-diego-quarantined-as-psyllid-count-mounts © Copyright Market Intelligence Ltd - Fruitnet.com 2014. The copyright on this article and all content published on Market Intelligence Ltd - Fruitnet.com is held by Market Intelligence Ltd - Fruitnet.com Limited, a joint venture between Market Intelligence Limited and Dr Rolf M Wolf Media GmbH. All rights reserved. Neither this article nor any part of it may be reproduced, stored or transmitted in any form, including print- outs, screen grabs and information retrieval systems, without the prior permission of the copyright owners. The retailer currently operates 229 stores year as a whole, Rimi Baltic’s sales in the three countries, where it runs 245 outlets, But, in spite of the presence of Ahold, that many of the group’s stores are totalled €1.15bn, a 12 per cent decrease Lithuanian group Maxima remains by far outdated in terms of store design and compared with 2008. the largest grocery retailer in its native technical equipment. country, dominating both the hypermarket However, although Rimi Baltic has and supermarket sectors. Further expansion across the Baltic states undoubtedly suffered tougher trading may also come from Maxima’s Lithuanian times of late, its considerable presence in all Maxima also has strong presences in rivals, who have already began to make three countries serves to demonstrate the Estonia and, in particular, Latvia and, progress outside of their domestic confines. growing interest of foreign retailers from according to Planet Retail, the company outwith the Baltic region in the market. now has its sights set on expansion into Coopernic-owned Iki entered Latvia in Poland, although the analyst stresses that it 2004 and now operates a substantial International buying group Coopernic “remains to be seen whether or not such a network in the country, while Lithuania’s acquired an 80 per cent stake in Lithuanian move is too ambitious” a step for the group. second largest retailer Norfa, which retailer Iki in 2007 and the company now currently has 124 stores and an estimated operates a total of 118 supermarkets in But, while Maxima has made a substantial 10.5 per cent of its domestic market, Lithuania and 59 stores in Latvia. Finnish impact on the Lithuanian and to a lesser expanded into Russia in 2007. The retailer SOK also opened its first two stores extent Latvian markets, the Estonian company has reportedly opened stores in in Lithuania in 2009, despite the domestic grocery retail scene is dominated by its Ryazan, Kolomna and Yegorovsk and is dominance of Maxima and Rimi Baltic. own domestic success story – the ETK understood to be looking to purchase more association of retailers. The group operates plots of land. But, while western retailers like Ahold and a network of around 188 supermarkets and Coopernic have been building their stakes neighbourhood stores around the country, Of course, none of the Baltic republics are in the Baltic market, others have had rather particularly dynamic grocery retail particularly in low income, rural areas less positive experiences. The Hungary- markets when compared with larger, where there is little competitive pressure based retailer CBA entered the Lithuanian from retail chains. western European countries, but the market in 2003 in a joint venture deal with gradual predicted recovery of the three the country’s Aibe group. However, the However, Planet Retail predicts that given nations from recession over the next two company withdrew from the arrangement the long-term trend for significant sections years could yet entice more development in 2007. Similarly, top German discounter of the Estonian population to migrate from in the region over the months to come. Lidl withdrew from its stated plan to enter the countryside to cities, the future for Lithuania in 2006, citing the country’s small cooperatives such as ETK “will become size. starker”, especially as it says http://www.fruitnet.com/americafruit/article/1474/parts-of-san-diego-quarantined-as-psyllid-count-mounts © Copyright Market Intelligence Ltd - Fruitnet.com 2014. The copyright on this article and all content published on Market Intelligence Ltd - Fruitnet.com is held by Market Intelligence Ltd - Fruitnet.com Limited, a joint venture between Market Intelligence Limited and Dr Rolf M Wolf Media GmbH. All rights reserved. Neither this article nor any part of it may be reproduced, stored or transmitted in any form, including print- outs, screen grabs and information retrieval systems, without the prior permission of the copyright owners..

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