Grocery Retailing in Eastern Europe

March 2020

Grocery retailing in Eastern Europe is growing moderately. A major structural change is being seen, as evidenced by the dramatic decline of traditional grocery retailers, which is giving way to large modern grocery retailers. As the market transitions towards consolidation and maturity, the largest players will experiment with new store concepts and digital innovations.

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Key Findings

The market is on the path to consolidation and maturity

In the last few years, the largest Russian retailers, such as X5 Retail Group and Magnit, were opening hundreds of stores each year; thus penetrating regions with virtually no presence of modern grocery retailing. This is a good example of the situation in the region, where independent retailers are dramatically losing against big players.

Discounters is a channel with great potential in markets outside of the EU

Discounters have been a hit among consumers in many Eastern European countries, such as Poland, Romania and the Czech Republic. At the same time, discounters have no presence in Russia and Ukraine, where value-seeking consumers would receive the new format well.

Traditional grocery retailers are losing out to modern formats

In almost all Eastern European markets the landscape is dominated by modern grocery retailers. Modern grocery retailers are rapidly cannibalising the sales of traditional grocery retailers, mainly due to greater economies of scale and higher value for shoppers. This trend is expected to continue in those markets where the share of traditional grocery retailers is still high.

Sustainability trend emerges gradually

Eastern Europe is not at the forefront of environmental consciousness among consumers, unlike Western Europe. Yet themes of sustainability are becoming ever more important for consumers in Eastern Europe. Grocery retailers will need to respond accordingly by offering recycled packaging, lowering CO2 emissions in their operations, and participating in various other sustainability initiatives.

New technologies provide immense opportunities

As more and more Eastern European consumers are connected to the internet, retailers are able to reach out to them using various digital channels. This provides great opportunities for interaction and offering personalisation.

Introduction

Scope
Key findings

Regional Overview

Eastern Europe posts weak growth in times of uncertainty
Grocery retailers set to post stable growth
Modern grocery retailers grows…
…at the expense of traditional grocery retailers
Poland sees the strongest growth in market size, followed by Romania
Growth of modern retailers compensates for the decline of traditional

Leading Companies and Brands

Eastern European markets move toward s consolidation
Sharp dynamism of top 10 companies, determined by the low base
Russia has domestic champions; foreign companies prevail in EU markets
Pyaterochka climbs to the top, Magnit and Lidl remain strong

Forecast Projections

Region’s main markets to show moderate growth
In many countries, a demographic decline means weak growth
Grocery retailing goes digital, while lines between industries are blurring

Country Snapshots

Russia: market context
Russia: competitive and retail landscape
Poland: market context
Poland: Competitive and retail landscape
Romania: Market context
Romania: competitive and retail landscape
Ukraine: market context
Ukraine: competitive and retail landscape
Czech Republic: market context
Czech Republic: competitive and retail landscape
Hungary: market context
Hungary: competitive and retail landscape
Belarus: market context
Belarus: competitive and retail landscape
Slovakia: market context
Slovakia: competitive and retail landscape
Croatia: market context
Croatia: competitive and retail landscape
Serbia: market context
Serbia: competitive and retail landscape
Bulgaria: market context
Bulgaria: competitive and retail landscape
Lithuania: market context
Lithuania: competitive and retail landscape
Slovenia: market context
Slovenia: competitive and retail landscape
Latvia: market context
Latvia: competitive and retail landscape
Estonia: market context
Estonia: competitive and retail landscape
Bosnia and Herzegovina: market context
Bosnia and Herzegovina: competitive and retail landscape
Georgia: market context
Georgia: competitive and retail landscape
North Macedonia: market context
North Macedonia: competitive and retail landscape
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