Supermarkets in Bulgaria

PROSPECTS

Supermarkets to develop urban networks

While the gradual decline of the urban population represents a challenge for supermarkets, the channel’s reliance on urban locations means that it is not as exposed to the significantly more marked fall in the number of rural consumers as other channels. Over the forecast period, supermarkets are expected to drive growth through the expansion of store networks in order to deepen their penetration of urban centres and enhance the convenience of their offer.

Leading players add new outlets

The major supermarkets operators made significant investments in store network expansion at the end of the review period. Fantastico, the second largest supermarket brand in Bulgaria, invested in a new store and the renovation of an existing one in Sofia in 2018, with the brand operating more than 40 outlets in three cities – Sofia, Elin Pelin and Kyustendil – by the end of the review period.

New T-market store targets modern lifestyles

T-market, the third largest supermarket brand in the market, also opened new stores in 2018, including a new concept store in Sofia that highlights the channel’s growing focus on developing formats suited to deepening urban penetration. Opened in November 2018, the new T-market Express store has an area of 1,200 sq m and places a strong emphasis on convenience.

COMPETITIVE LANDSCAPE

Leaders pull away

While supermarkets remains one of the most fragmented and intensely competitive channels in modern grocery retailing in Bulgaria, the review period saw a significant process of consolidation, which continued in 2018 with the top two players gaining value share. Store network expansion played a significant role in the share expansion of the top two brands - Billa and Fantastico.

T-market development causing trouble for CBA

CBA is T-market’s most direct rival, with both brands targeting low- to middle-income consumers with stand-alone stores. CBA has tended to utilise smaller format stores that have allowed it to penetrate more deeply into residential urban areas.

Leaders adopt different strategies to target similar consumers

Billa and Fantastico compete for the attention of middle- to high-income consumers. Billa is making significant efforts to establish a strong presence in shopping centres and generally keeps the focus of its outlet network on urban centres with high average wages, such as Sofia, Plovdiv, Varna and Burgas.

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