Tesco, Delhaize and Carrefour try to buy Bulgarian retail chains


"
Bank of the People"
, this is ambitious, the British Tesco. It would not surprising if Tesco was a credit institution, it is actually a chain already offers financial services. World crisis changed everything. Everybody makes all sorts to attract buyers to consolidate (and in some cases to save) its financial results. U.S. stores as cluttered market with a "
cacophony of price promotions, both wrote in recent months, Financial Times, Germany Edeka and Rewe companies announced that they will develop at longer shop with discounts (Discount Stores), to meet customer demand to less expensive range.

At this point, Bulgaria once again became interesting for some of the largest retail chains for FMCG in the world and in recent months they started to explore the market to connect with local companies and offer them deals.

At least three foreign chains from the beginning of the year looked at the opportunity to buy some Bulgarian shops, sources told Capital. Two retailers have no business in the country and possible step will be debut. The third chain of stores there this year, builds new, but as shown, is seeking to acquire a competitor to quickly reach a leading position.

Why now

The question that many would ask is why in times of crisis and in a time when demand is shrinking, new players want to expand their international business. Indeed, the crisis is precisely the reason for such an approach. When mature markets, sales decreased or at best keep the levels from the previous year, traders have the opportunity to increase their revenues, as steps in the business, which is still evolving. Tesco for instance, wants to expand its international business precisely because of this reason. The annual financial results for the group in 2008 shows that its total revenues have grown by around 15 percent and reach nearly 60 billion pounds. At the same time, Group sales abroad have grown by 30 per cent. In declaring in April as international operations director Philip Clarke announced to the FT, that this year the focus will be aimed at emerging markets such as South Korea and China.

The most attractive is now considered the Middle and Far East, Brazil and Latin America, but not negligible, and the market in Central and Eastern Europe. This conclusion is confirmed by the study of traditional ATKearney now trade around the world (The 2009 ATKearney Global Retail Development Index). "
While global trade has been hit hard, emerging markets are still attractive,"
says the material. Retail chains in developed markets such as USA and Western Europe, reported a decline in consumer demand and increasingly fierce struggle of competition for market share, says the study. According to the report of Deloitte trade worldwide trend in countries like China and Russia is the opposite - traders in emerging markets will take note and continue to achieve double digit growth rates.

These two conclusions are based on the strategy of many large international companies seeking access to new markets. More so during the crisis in all spheres of business is undervalued and now is the time when investors can buy the low prices. Enough to have cash, but in most cases this is not a problem for companies that have revenues each day in its stores.

Why Bulgaria

Indeed, the attractiveness of Bulgaria is far below that in markets such as Russia or China. In the index of ATKearney country is at 21st place out of 30 countries with the potential for investment in trade. Bulgaria even gave five positions compared to last year. However, investors have few reasons to like the possibilities of the Bulgarian market. The most significant plus is that the so-called organized trade (all formats and types of retail chains) is only about 30% of all sales of FMCG. The tendency is to increase the proportion of chains and it is from this, plus you will want to take advantage and new players. Another positive point in favor of Bulgaria that the country occupies a strategic location for transportation and logistics. Thus, circuits that have business in Romania, Greece and Turkey, will naturally want to increase their territory of influence. For example Delhaize is present in Romania and Greece;
Carrefour operates in three states and in Bulgaria;
Tesco set foot in Turkey since 2003 and has over 60 stores now. For all of them it is logical to want to work in Bulgaria.

Moreover, the market will soon be ponasiti opening of new stores of foreign chains such as Lidl, Plus and Penny. Then enter, especially the green, may lose its meaning.

Who wants to fill your basket

If for example, Tesco get a foothold in Bulgaria, that will change the whole business environment. The reason is that the world number three, number two in Europe and number one in Britain (according to the most recent study by Deloitte for the chain). And she wants to stand, but the proof is that a few months ago was interested in the Bulgarian market, learn the Capital. On its own initiative and through the firm Tesco is linked to one of the biggest Bulgarian traders call for a meeting. The proposal makes it clear that foreign interest in the chain is part of the capital of the Bulgarian company. However, no meeting took place.

Currently the British chain will not take any other action and will wait several months to make clear how it will develop a political and economic situation in Bulgaria.

Official from the headquarters of Tesco not confirmed the information of interest to the market. "
I do not comment on rumors and speculation. We are exploring opportunities worldwide, told Kapital"
manager for relations with the company Max Curtis. The answer really could not be otherwise, since Tesco is a public company and any unofficial information would affect the movement of shares.

And Belgians for color

The largest Belgian trade group - Delhaize, is another new candidate, staring eyes to the possibilities of the small Bulgarian market. Initiative to the country of Belgium is not the first time. Nearly two years ago they were feeling the market and have held talks with potential partners. Until a deal is not reached.

Now the chain has given a mandate to the consultants in Bulgaria to offer them appropriate to buy chains. There is already meeting with some of the companies in Bulgaria, informed sources "
Capital"
. At the moment the ball is in the hands of a Belgian company, which must decide whether the motions are recorded by Bulgaria in its concept for expansion.

And the office of the Belgian chain have denied interest. And she, as Tesco, is public. The day on which the Capital receive the responses, the Belgian newspaper L'Echo quoted the executive director Pierre-Oliver Bekers confirmation of interest in the Bulgarian market. The chain has a business in Greece and Romania and wants to be among the top three for traders in this region reported more issue.

As Tesco, Delhaize and would be willing to enter Bulgaria in smaller shops, even only in Sofia, then to develop its network. Possible first purchase would serve as the basis on which to grow their business. For now both companies dismissed the option to start the activity of the green, as did one of their main competitors on the international level - French Carrefour.

Impetus to the first place

Indeed, precisely Carrefour is the third international chain, which would have interest to acquire its competitor in Bulgaria. The trader opened its first store in the Bulgarian Burgas this year, has signed leases with retail outlets and partners in different cities in the country, but for now this is not enough to end up there, where one has chosen - to the first place. Before opening the first store manager Jean Antoine chain announced a meeting with suppliers in the coming years, wants to be number one. Therefore, the French company has chosen to grow in two ways - by opening its new stores and acquire facilities to competitors. Have already sent proposals to meet potential partners, sources told Capital, but a specific agreement is still too early. Calls for proposals were sent to the chains as "
Fantastico"
and Piccadilly, where, however, did not want to comment on the information.

Carrefour's office also did not comment because they are changing the management of Bulgaria, and this may lead to changes in specific actions and strategies.

But ...

As shown by the actions of the new tracks they are interested mostly in options to buy an existing company. The choice is not great, not to say almost no. If you look at companies with Bulgarian property, they must be like someone from "
Fantastico"
, "
Europe"
, "
Family"
, CBA, "
Enna"
, 345, Elemag, Promarket ... Except for the "
Fantastico"
, which currently includes all sorts of revolting offers to buy the rest are either too small or unattractive locations and unattractive business model. Then remains the new international companies the option to switch to other foreign competitors on the Bulgarian market. Most of them are not willing to sell their business at this moment because it is undervalued. So as to have an interest in the market (which is positive), rather chance a deal is rather zero (which is not so positive). Or at least not this year.

Why is everything duplicated?

I think I have fixed it ?

ATB

Yes admin, much more readable now.