The Russian food chain MERE recently announced its arrival on the Serbian retail market. MERE should open 100 stores in Serbia, and each would cover some 1,000 square meters.
The owner of the company is Torgservis, with its headquarters in the Siberian city of Krasnoyarsk, which operated mainly in small Russian cities, but today it is also present in Belarus, China and Kazakhstan.
This retail chain operates under the Svetofor brand and is owned by the Torgservis group, which operates in more than 800 locations in 10 countries and has existed since 2009. They operate in our vicinity in Romania, and the plan is to expand to Greece as well.
The chain, based in Siberian Krasnoyarsk, operates mainly in smaller cities, and last year it arrived in Germany, where it was forced to close its first store in Leipzig five days later – due to high demand and a shortage of supplies. The price of half a kilogram of coffee at that time was two euros.
Their business policy is to work directly with manufacturers, strict quality control and low margin.
The advantages of this retail chain are that, as stated on their website, the prices are lower by 20 to 30 percent than the market ones.
“This can be achieved by reducing the cost of packaging – we do not need colorful and attractive packaging. In the case of well-known brands that have a reputation, that difference should be up to 50 percent,” they state on the site.
In addition, as other advantages, they state that in their stores, the customer pays for the goods and not the brand, and that they are in locations that are easy to access.
The clients of this chain are “mostly people who like to save time and money. Many of them are middle- and lower-income families who carefully plan their purchases and visit the store 1-2 times a week.”
This retail chain has been in the top 10 Russian grocery stores since last year, with about 500 stores open in 2019 alone. This has made the company one of the fastest growing supermarket chains in the country, following market leaders X5 (Retail Group) and Magnit.
According to the media, the corona crisis would “push” this chain further. About 20 percent of the Russian population is already facing poverty, and the decline in purchasing power and consumer confidence could further increase the customer base of this chain.
What consumers otherwise resent about this retail chain is the “raw” performance where the stores are more reminiscent of a warehouse than a store, according to the media. However, as DW writes, consumers do not mind as long as they have something to buy at a lower price.
MERE will not have problems to fit into the atmosphere, believes associate of the Institute for Market Research Sasa Djogovic, because, as he says, there is a strong Russian sentiment in Serbia.
“Depending on the strategy and how much it will be and in what way it expands, I believe that it will gradually conquer our market, and if it enters with a larger number of facilities, as announced, I assume it will start from Belgrade and other large centers,” Djogovic told Danas.
“It will take time to spread, but it will succeed thanks to the sentiment that exists here towards Russia, because everything that is Russian is always accepted here,” Djogovic notes.
In his opinion, prices will be even lower, especially when they are just entering the market, because, as he explains, the price in Serbia is the main factor.
“Besides that, they will offer consumers in Serbia a range of their products that we know very little about, they are unknown to us, so they will play on that too. Regardless of the quality, it will be something new,” he emphasizes, BizLife reports.
