By retail business expert Sebastian Rennack
Discount Retail Chain Lidl's (owned by German Schwarz Gruppe) successes in Croatia and Serbia allow Lidl to take the next step in the Balkans, to Bosnia and Herzegovina. According to German respected grocery retail magazine LZ, the first store in BiH should be opened in 2022.
Anyone looking for Lidl in the Bosnian capital Sarajevo has so far only been able to find an outlet store that even has the Lidl logo, but according to the store's Facebook page, non-food products of various Lidl brands are sold there. By the way, the store in the city center has nothing to do with Lidl.
But there should soon be a real Lidl store in Sarajevo: Bosnia and Herzegovina is one of the countries Schwarz Gruppe has added to the list for enlargement. Simultaneously with the entry into the Serbian market, rumors were heard five years ago, which were later denied. Now the plans are apparently being implemented. However, Lidl did not want to confirm the exact date of entry into BiH market.
Although the project of enlargement to the entire Balkans did not aim at a large financial effect, the opposite happened, Croatia and Serbia soon became among the strongest markets of the Schwarz Gruppe. With weekly sales in the equivalent of 240,000 to 250,000 euros (net) (US$284,000 - US$296,000), Lidl's subsidiaries in Serbia are currently a result that raises boundaries, and successes are measured against them.
In comparison: 3,200 discount stores in Germany have an average weekly turnover of almost 140,000 euros (US$165,000), if you divide the annual turnover of 22.7 billion euros (net, without online sales US$26.9Bn) by the number of stores. The Serbian national company, which started operating in 2018, even surpassed the previous champion of sales, Lithuania, in the internal Lidl rank. There, the business started in 2016 with weekly sales of up to 230,000 euros (US$272,000), but has since dropped to just under 200,000 euros (US$237,000), company experts report.
Lidl Serbia is not only extremely good in terms of sales, the profit margin before taxes is also impressive in 2019/2020, according to internal commercial regulations, this value was planned as a minus of 5.3% for the second year of operation.
Large and modern shops in Serbia were not approved when they started business in Neckarsulm. Buildings that look like "glass palaces" are obviously well received by customers. According to the company, the range includes about 1,800 SKUs, in addition to Lidl's own Private Label brands, there are also a good 400 products from about 60 domestic suppliers.
In Croatia, Lidl has been operating in the corona year with a 6% drop in sales, due to the weak tourist season in the country. According to LZ, several Croatian Lidl subsidiaries are among the best-selling locations in the world of Lidl in the summer months.
However, Lidl has also gained a leading market share in Croatia in recent months: according to trade experts, allegedly a competitor Konzum had a minus of 12%, and smaller suppliers even more. The sister company of the Schwarz Kaufland supermarket chain did better, as it had minus 8%. The Croatian model is not a bad pattern for Bosnia and Herzegovina either, because there are very close ties between the two countries.
In an interview with LZ, a Bosnian food retail insider speculates that Lidl will initially open facilities in places with more than 30,000 inhabitants. "In this case, Lidl has the potential for 30 cities." Centers with higher purchasing power, such as the capital Sarajevo or Mostar, have the potential for more locations.