Food retailers are expanding warehousing space and networks at the same rate. Retailers have announced overall investments worth above 50m euros on the logistics segment for this year alone.
On a market that ranks second in the region in terms of size, strategies related to where a warehouse is located can make the difference in terms of profit for major food retailers.
In the case of discount store networks, entrance onto a new market first entails the establishment of logistic centre, followed by store openings.
Kaufland and Plus invested a total of 55m euros in warehouse in Ploiesti in 2005. Subsequently, after the first store openings, retailers announced further investments to expand warehouse space, to keep up with the fast network expansion.
Following the same strategy, German discount store Lidl, which is looking for locations to open its first stores in Romania, is building a 45,000-square metre logistic centre on the outskirts of Bucharest.
Other major retail groups are also making massive investments in logistics to support domestic network expansion. For instance, Carrefour last year signed the biggest rental deal on the segment of logistic space in Romania. According to ZF estimates, Carrefour paid around 15m euros to rent a 45,000-square metre warehouse and another 2,000 square metres of offices in Cefin project. The space will be taken over in several stages by 2009. Logistic development is of more importance since EU integration, after the level of Carrefour's direct imports increased considerably. Carrefour representatives specified the expansion of logistical capacity was also dictated by the network's strategy of expanding its supply of fresh products.
Billa, the biggest supermarket network on the market with 29 stores, is currently involved in a logistics investment similar to Carrefour's. The operator recently announced investments worth around 20m euros in a 17,500-square metre warehouse in Brazi, close to Ploiesti. Rewe, which owns Billa, Selgros Cash&Carry and Penny Market in Romania, has recently set up a procurement centre for Billa and Penny.
After it acquired La Fourmi, Mega Image, the biggest supermarket operator in Bucharest, started to construct a logistics centre close to Bucharest. It acquired 10 hectares of land and will invest 5m euros to build a 40,000-50,000 square metre warehouse.
All retail groups that operate in Romania with several store formats work with suppliers through various procurement centres.
Considering international retailers ambitious expansion plans, these companies will make further massive investments in logistics on the Romanian market. Of all the various formats of food store, hypermarkets have boasted the most spectacular trend in recent years.
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