Supermarkets in Bulgaria

PROSPECTS

Growth of supermarkets depends on developing urban store concept

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

Leading players focus on expansion of store networks

Leading players made significant investments in store network expansion towards the end of the review period. Van Holding EOOD, the second-ranked, company in supermarkets in Bulgaria, opened a new Fantastico outlet and renovated an existing one in Sofia in 2018, operating over 40 stores by the end of the review period.

Companies broaden private label lines to attract new consumers

Supermarket chains are increasingly focusing on private label development as a strategic tool to accomplish several aims. Private label products attract low-income and price sensitive consumers, thus allowing supermarkets to expand its current consumer base and compete more directly with discounters.

COMPETITIVE LANDSCAPE

Billa remains ahead, followed by Fantastico

While supermarkets remains one of the most fragmented and intensely competitive channels in modern grocery retailing in Bulgaria, the review period saw significant consolidation among the leading players. Billa Bulgaria maintained a clear lead of supermarkets with its Billa brand in 2019, followed by Van Holding and its Fantastico brand.

Leaders adopt different strategies to target similar consumers

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

T-market’s development presents challenges to CBA

CBA Bulgaria’s CBA is T-market’s most direct rival, with both brands targeting low- to mid-income consumers through stand-alone stores. CBA mostly utilises smaller format stores that allow it to strengthen its presence in residential urban areas.

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