The emergence of new trade chains has sparked discussions about their potential impact on market competition and consumer prices, particularly in the food sector and other non-durable goods. Recently, the Commission for the Protection of Competition has initiated proceedings against four retail chains, with the Prosecutor’s Office also joining the investigation—marking a notable development in our country.
Reports from the specialized portal Retail Serbia indicate that the Macedonian discount chain Stokomak is contemplating an entry into the Serbian market, potentially launching stores in the first quarter of next year with a promise to deliver “the best quality at the lowest prices.” Additionally, the Bosnian Tropik trading chain, once the largest in Republika Srpska and previously acquired by Delta Holding, is also eyeing the Serbian market as a competitor.
Despite these developments, a crucial question lingers: Will these new entrants lead to price reductions, or will they merely align with the existing chains’ pricing strategies? Boban Stojanović, a professor at the Faculty of Economics in Niš, suggests that high prices are influenced not only by retailers but also by certain manufacturers and importers. He emphasizes that the antimonopoly commission plays a vital role in fostering competition and expresses skepticism about any significant change resulting from the new chains’ arrival.
Stojanović argues that regulatory bodies must effectively create an environment conducive to competition. He predicts that local merchants will eventually mirror the pricing behaviors of established traders, as higher prices with lower turnover may prove more profitable for them. He also points out the challenges small businesses face in entering retail chains due to practices like “free first fill.”
He recalls the expectations surrounding Lidl’s entry into the market, highlighting that merely increasing the number of chains does not guarantee competition. For true competition to flourish, a well-organized state is essential. Stojanović believes that while larger, reputable chains from Croatia or Bulgaria could instigate change, the regional newcomers are unlikely to do so.
The Commission for the Protection of Competition recently conducted unannounced inspections at the offices of Delez, Mercator, Univerexport, and DIS as part of their investigation into potential competition violations. Their analyses revealed that from April 2023 to March 2024, retail price growth significantly exceeded inflation rates, with traders seeing increased margins and profits without notable price differences across chains, despite varied procurement conditions.
Economist Saša Đogović stresses the importance of an independent regulatory agency that reacts swiftly to market distortions. He calls for severe penalties for any proven attempts to manipulate competition and encourages consumer organizations to consider boycotting offending stores.
On the positive side, Đogović anticipates that the new chains will introduce price competition, complicating negotiations for existing retailers. He supports the entry of new players into the market, believing they can enhance quality and drive down prices initially to attract consumers. To maintain their customer base, these chains will need to sustain their competitive edge.
In summary, while the entry of new trade chains could potentially reshape the competitive landscape and impact pricing, much will depend on regulatory actions and the chains’ strategies to engage consumers effectively.
