Poland: Russian Hard Discounter MERE started in Częstochowa
Updated: Jul 31, 2020
Discount Retail Chain MERE (part of Svetofor and owned by Torgservis) opened on July 25th its first store in Poland. The hard discount store format was opened at 1 Maja Street in Częstochowa. The MERE hard discount format is essentially a warehouse store totally not in line with the store format of today's modern supermarket landscape. No convenient shelving, decent shopping arcades, all kinds of self-service cash desks and numerous staff. Everything is sold from pallets and/ or in boxes straight from the shelves, perishable products are in huge refrigerators.
Mother Discount Retail Chain Svetofor is active in Russia, Kazakhstan, Belarus and China, and opened stores in Romania, Germany, Lituania and now Poland under the brand MERE. Svetofor controls over 1,500 stores in Russia, Kazakhstan, Belarus and China, opened its first discount stores in Germany and Romania in 2018 and 2019 and Lituania last month. The Svetofor chain of stores is managed by Torgservis. The owners are the Schneider family (92.5%), Valery Yakovlev (4.5%), Andrey Veykulainen (3%). Torgservis took the ninth place in the ranking of Russian FMCG retailers, compiled by InfoLine at the end of 2019, with around 500 stores opened in 2019 alone. This makes the company one of the fastest growing supermarket chains in the country, right after the market leaders X5 Retail Group and Magnit. Both X5 and Magnit also recently opened a discount store format in Russia. Torgservis revenue in 2019 amounted to a little more than $1.4B (26% more than in 2018).
According to the Lithuanian business newspaper Verslo zinios, after the Baltic states, MERE also intends to enter the markets of France, Spain, Italy, Greece, the Czech Republic and other EU countries. The main strategy of MERE is to keep prices 20% lower everywhere than its closest competitors. Offering low prices because MERE works directly with manufacturers, has a strict cost policy and applies minimum margins. In its stores, the customer pays only for the goods, not for the brand and bright packaging.
In the case of the MERE stores, it is a 'hard discounter'. Will the Polish consumer accept this 'hard discount' format? The experience to date in the Polish market shows rather that consumers, unlike, for example, the German consumers, prefers the 'soft' discount format, with a slightly wider range and occasional premium category products. The pandemic, however, could help the MERE chain grow. Consumers are starting to look at their spending, and the slogan of the MERE concept is low prices.
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