Delhaize, operator of the Mega Image supermarket chain, istapping into discount retail, the most dynamic segment of themarket this year, through Red Market, a concept to be developedboth in small towns and in big cities.
After attempting to buy the Profi chain, the third largest fooddiscount chain in the Romanian market, Delhaize takes a stab at thelow-price segment with its own brand, first launched this year onthe Belgian market.
"Red Market is positioned between the supermarket and thediscount segment, and will be developed both in small towns and inbig cities," said Raluca Pavel, marketing manager of the Mega Imagechain.
This year the company entered the race to take over Profidiscount chain, according to market sources, but the informationwas not confirmed by representatives of the Belgian retailer.However, Profi shareholders sealed the deal with EnterpriseInvestors, manager of Polish Enterprise Fund VI, which offered 66million euros for taking over the 66-store chain.
The first Red Market store on the Romanian market covers 1,200square metres and has 4,000 listed articles, including Delhaizeprivate labels, being located in the Green City residentialdistrict in 1 Decembrie commune near Bucharest. Mega Imagerepresentatives did not reveal the value of the investment, but itcan be put at around one million euros.
Discount chain Plus also relies on a strategy of expanding intonew residential districts, with the retailer already having foursuch stores.
On the Romanian market, the discount store segment could amountto nearly one billion euros this year, considering that the bigchains continued their expansion by opening at least the samenumber of stores as in 2008. In addition, most discount storeoperators reported organic sales rises (in stores older than ayear) in the first six months of 2009 compared with the first halfof last year.
The fight for the no. 1 spot on this market is waged between twoGerman chains, Penny Market - operated by the Rewe group - andPlus, held by Tengelmann. Next year will see the launch of anotherhard discount German retailer on the Romanian market, Lidl,operated by the Lidl & Schwartz group.
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