Mixed Retailers in Hungary

TRENDS

Variety stores retailing is the only channel representing mixed retailing in Hungary, as department stores were closed during the period 2007-2016. Mass merchandising and warehouse clubs have never been tried within Hungarian retailing and there are no short-term plans for opening such retailing concepts. The once-popular independent variety stores continued to lose sales and share against modern grocery retailers, which tend to offer more-affordable products. Only chained operators are able to compete with modern grocery retailers, which is mostly attributable to special deals on packaged food and home care products.

COMPETITIVE LANDSCAPE

Goods Market Hungária, with 268 outlets, is by far the largest network and led mixed retailing in 2016 with a 17% value share. Outlets are located mostly in smaller countryside towns, especially in locations where the prevalence and competitive threat from discounters and other modern grocery retailers are weaker, or these outlets are not close enough to attract consumers.

PROSPECTS

Mixed retailing will remain a niche channel during the forecast period – both in the short and long term – with a diminishing share within store-based retailing. Only chained operators at carefully selected locations and with competitive ranges of packaged food and other grocery products are expected to sustain their market positions. The relaunch of the department store as a retailing concept is highly unlikely, as the lack of good retail locations and contemporary facilities are the main obstacles. Retail investors prefer opening shopping centres with more-complex services and a higher expected rate of return, backed by a more-varied tenant mix that is resistant to seasonality and recession.

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