Kaufland, the hypermarket division of Germany's Schwarz Group, one of the leading players on the European retail market, is to invest nearly 500 million euros in Romania over the next five years.
"Our plan for the next five years entails the opening of 50 stores. Investment per store will range from 8 to 10 million euros, depending on size and location," Gunter Grieb, Kaufland Romania CEO, told Ziarul Financiar.
Grieb, 36, ran the Romanian operations of German petroleum group Aral since 1996. After the international takeover of Aral by British Petroleum (BP), he coordinated the integration of Aral's Eastern European operations into BP. He was recruited by Kaufland in 2002, and the operations of the German retailer began in 2003.
The approximately 450 million euros' worth of investments in new stores will be followed by another 40 million euros for the development of a central warehouse, the key element in the German company's logistics in Romania.
Grieb declined to reveal further information as to the size of the warehouse, however Romania can be expected to follow the example of Czech Republic, where Kaufland has 70 stores and a 60,000 sqm warehouse.
The first Kaufland in Romania will open this summer in Bucharest on the site of the former soap factory Stela, close to Bucur Obor, and will serve an area fought over by an XXL Mega Discount! store, a Gima supermarket and two hypermarkets, Cora and Carrefour.
"We will open several stores this year, all of which in the second half of the year," Grieb added.
Grieb says the Kauflands in Romania will come with a 3,500-5,000 sqm commercial area.
"We have bought a lot of land in the most important cities of Romania and have construction permits for part of it, with authorisation pending for the rest," Grieb explained.
Grieb indicated on a map of Romania on which almost every major city either has a green flag (all permits secured, construction about to begin) or red flag (land purchase in progress, permits about to be obtained). Kaufland's list includes both cities with more than 100,000 people and "the smaller ones with a purchasing power that justifies an investment on our part."
Moving ahead at a rate of 10 stores per year, Kaufland will soon start to turn a profit. Kaufland estimates average sales per customer, the so-called "average basket", will be higher than the 6-7 euros a customer spends at a Polish Kaufland, but lower than the 12 euros spent by their Czech counterparts.
"Our plan is to start making profit in our third year in business, namely at the end of the financial year 2007. Our plans are very modest, though," Grieb explained, given that almost every foreign retailer on the Romanian market has enjoyed results beyond expectations.
The first of the international players, who entered the Romanian market in the second half of the 1990s - Metro Cash & Carry (21 stores, over 300 million euros in investments) and Billa (13 stores) - have been making profits for a number of years. The same is expected to happen to the French Carrefour Group (4 stores, 140 million euros in investments) and Selgros Cash & Carry (7 stores and over 100 million euros in investments).
ionut.bonoiu@zf.ro
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