Siberian Discount Retail Chain MERE (owned by the Russian Svetofor group means translated traffic light) and started in 2009. After a first expansionary phase within proximity countries, in 2017 it began its landing in markets of Eastern and Central Europe (Ukraine, Romania, Lithuania, Poland and Germany) and since 2020 it has offices and headquarters in countries as western like the UK, Italy, France or Spain.
In principle, the effective entry with operational stores in the Spanish market was planned for the year 2022 but, as reported this week exclusively by the specialized media InfoRETAIL, “the project has been decided to accelerate as a result of the Covid-19 crisis". And it is that the crisis situation driving the Russian discounter, whose market approach is 'hard-discount' in which it differentiates from the now avant-garde leading food discounters DIA, LIDL and ALDI. With the philosophy 'no frills', MERE is committed to sober stores in which all products are stacked on pallets or in their own boxes and there are no employees except to replace empty spaces and to charge.
What is sold and where will MERE go?
The assortment is mainly made up of regular basket consumer goods (dry food, personal care, home care and pet food), as well as in&out SKUs (so called bazaar goods). Prices are up to 20% lower compared to the cheapest retailer.
The locations chosen are medium-sized buildings (between 800 and 1,000 m2) located in peripheral areas of large cities, equipped with their own or shared parking outside. The first expansion will take place in municipalities of Madrid, Valencian Community, Murcia, Castilla y León, as well as in Catalonia, where it has located its headquarters.
Who are MERE's competitors?
The Spanish supermarket and self-service sector is one of the most varied in terms of diversity of formats. Multinational food retail companies (such as Carrefour, Alcampo, Lidl, Aldi, DIA ...), Spanish market leader Mercadona and a large number regional or even local chains competing side by side in many markets.
In this context, discount chains strictly based on the hard discount concept as MERE, have been gradually abandoned by the major players in the sector, but there are companies that in recent years are succeeding with approaches based on stock opportunities (bargain chains) or in the reduction of store costs (family cash).
The bargain chains formats are retailers that carry out negotiations with FMCG and non-food producers and distributors based on irregular product offers, overstock, parallel imports, liquidation of stocks or phase-outs of products to obtain significant discounts that they offer to their consumers: this are companies such as Primaprix, Dealz or Sqrups, that already have more than 200 stores in Spain.
The family cash formats are supermarkets based on cash & carry formats (also known for hoteliers and professionals), but are open to everyone. The products are displayed on pallets and large metal shelves and on many occasions the stores are located in large semi-industrial warehouses located in peripheral areas and industrial estates. At the end of 2020, there were already 450 of these stores (according to data from the RETAIL DATA consultancy) located mainly in the autonomous communities of Andalusia, Murcia and Castilla-La Mancha. These are mainly regional chains such as "Cash Fresh", "Economy Cash", "Cash Ecofamilia", "Super Carmela Cash", although the Carrefour group also competes in this segment with "Supeco".
In a global way, the set of discount formulas where the price has a greater relevance (including the EDLP prices of Mercadona, DIA, Lidl or Aldi) sum up to about 3,900 stores out of the more than 24,800 stores with which the sector ended in Spain in 2020.
The low-cost discount retail phenomenon is exploding
In addition to the examples in the growing discount food retail sector, there are several retail chains that in recent years have been started in Spain based on an offer of household items, personal care and textiles at very cheap prices, with adjusted qualities, but with an approach aligned with the fashion and collections that are happening.
Following the Primark phenomenon, but located in much smaller locations (between 250-400 m2), the Dutch chain Zeeman entered Spain in 2015 , which is now close to 100 stores (especially located in Catalonia, the Valencian Community and the area east of Spain). Also in 2015, the German TEDi variety discounter made its entrance, with a complete offer of home bazaar items and already over 200 store locations (between 300-800 m2), Chinese lifestyle retail chain Miniso (6 stores) and Danish variety retail chain Flying Tiger Copenhagen (128 stores) spread throughout Spain.
The crisis that the COVID-19 pandemic is leaving will only reinforce this type of (inter)national discount food and variety brands and commercial formats ... and there are more knocking on the door, such as Action, PEPCO etc.
See here for more: https://www.niusdiario.es/economia/consumo/mere-cadena-rusa-supermercado-descuento-desembarco-espana-adelanta-por-crisis-covid_18_3083070378.html?amp=true
