Ali Capa, the chief financial officer of Anchor Group Romania, owner of G'Market supermarkets, believes store location in shopping centres and in city central areas will allow the network to deal with competition coming from major international retailers.
"On the medium term, we won't draw up any strategy to exit food retail because G'Market sales are still following an upward trend," states Ali Capa.
Thus, Anchor Group, developer of the first shopping centres in Bucharest, also owning Credit Europe Bank in Romania, denies rumours regarding the sale of G'Market to Carrefour.
According to the data provided by Gimrom Holding, a company part of Anchor group operating G'Market stores, the network has posted annual organic growth of around 11% since 2005.
"Organic growth allows us to improve our profitability: revenues are rising, while fixed expenses are flat," the manager explains. According to him, the company stepped into the black in 2007, posting net profit. "As a rule, in retail businesses, an exit from the market makes no sense when the network is in full expansion. It's not logical giving up the business at this stage, when a safe revenue over a certain period of time has been secured due to expansion," says Capa.
The company has earmarked investments worth some 4m euros for this year, in two new stores in Craiova and Arad, being in advanced talks to rent the space. Ali Capa specifies expansion targets other cities as well, with over 100,000 inhabitants, and more than two stores could be opened this year. Capa expects competition on the market to increase, as supermarket chains expand. The company mainly goes to rented locations, and Ali Capa says the rent for the space of a store does not exceed 3% of the value of sales.
"Once the scheduled stores have been opened, sales growth will reach 72% during the 2005-2008 period," the manager adds. G'Market projects 62m-euro sales for 2008. The operator's turnover reached 52m euros in 2007, up around 28% in euros from the previous year, according to company data.
"We see many opportunities on the domestic market. There are many shopping centre projects where we can find good locations to expand the store network. (...)," says Capa. Last year, Gimrom opened 4 stores, reaching 7 operational stores in late 2007. One of the new stores of 2007 was taken over from a small operator owned by Romanian investors, Mara Focsani.
G'Market last year had a monthly customer flow of around 530,000 people, with the most visited supermarket being that in Bucuresti Mall.
Anchor Group's first real estate projects in Romania were two shopping centres in Bucharest, Bucuresti Mall and Plaza Romania.
The group has diversified its portfolio, entering the office and housing segments. This year, it started erecting a second office building, due to be finalised in 2009.
Anchor Group
Does not plan to exit retail as location in shopping centres and city central areas will allow G'Market to face competition coming from major international retailers
The network has posted annual organic growth of around 11% since 2005
Has earmarked investments worth some 4m euros for this year, in two new stores in Craiova and Arad
G'Market projects 62m-euro sales for 2008
G'Market last year had a monthly customer flow of around 530,000 persons
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