Slovenia
Market Overview
Bord Bia, Frankfurt
November 27th 2008
Slovenian Market Overview
•
Population: Ljubljana
270,000 (Capital), Maribor
111,000, Kranj 53,300,
Koper 50,000, Celje
49,000
•
Language: Slovenian
•
Currency: Euro
•
Joined the EU in May
2004
Market Overview
•
The adoption of the Euro in 2007 was expected to fuel growth in GDP.
•
Private consumption was also expected to benefit from tax reforms which simplify
the personal income tax structure.
•
New government elections are taking place in October 2008.
•
GDP Growth - real growth rate 4.0% 2008(e) (IGD, 2008)
•
Inflation rate: 2.3% (2008(e)) (IGD, 2008)
•
Unemployment: 6.6% (2008(e)) (IGD, 2008)
•
Consumer spend per capita is increasing; up from €7,435 in 2005 to €8,348 in
2008 (IGD, 2008)
•
VAT: 20%
•
VAT on Food Preparations: 8.5%
Irish Export Performance
Irish Exports to Slovenia (2007)
Fish
6%
Beverages
41%
Vegetables and
Fruit
14%
Total value of
exports:
€1.2mn
Miscellaneous
edible products
39%
Source: CSO Food and Drink Statistics 2008
Key Consumer Trends
in the Market
•
The total retail market is growing quite fast with an increase of around €0.5bn for 2007 and 2008
(e). The grocery retail market is growing at a slower speed than that but still growing at around
€0.2bn a year.
•
Per capita spending is increasing but is still significantly lower than in Western Europe.
•
52% of retail sales in Slovenia are generated through the food retail sector.
2006
(€)
2007
(€)
2008 (e)
(€)
Total Retail Market (billions)
6.97
7.50
7.98
Grocery Retail Market (billions)
3.82
4.08
4.25
Grocery Retail Spend/capita
1,900
2,030
2,140
Source: IGD Country Presentations, 2008
Retail Grocery Market
•
Grocery Retail Value: €4.28 billion 2008(e).
•
Slovenian retailers dominate the market but there is a number of
international retailers who have entered the market - Spar International,
E. Leclerc, Aldi (under the Hofer name) and Lidl (IGD, 2007).
•
Acquisitions are a favoured strategy in Slovenian retailing with domestic
Mercator favouring a highly acquisitive strategy (IGD, 2007).
•
Hypermarkets first entered the market in 2000 and they dominate in
larger cites while smaller towns and villages still favour supermarkets.
(IGD, 2007)
Retail Grocery Market
•
The retail sector has had rapid transformation in recent years with a
move away from manufacturer power and the focus being placed on
larger retail formats and customer satisfaction.
•
Mercator are looking to expand their operations and to modernise their
current outlets. They aim to become a leading retailer in a number of
SE European countries such as Croatia, Serbia and Macedonia.
•
SPAR aim to have a 25% market share in the coming years and plan to
invest €100 million to achieve this. Their strategy will be a focus on
differentiation.
•
Lidl entered the market in March 2007 making it the 6th discount chain
on the market. They operate 28 stores currently in Slovenia.
Retail Market Share
SPAR
13%
Engrotus
12%
Aldi
2%
E. Leclerc
1%
Other
34%
Mercator
38%
Source: IGD Analysis Country Presentation Slovenia 2008
Retail Market Structure
Top 5 2006
Retailer
Total
Sales
(€m)
Grocery
Sales
(€m)
% Change
Grocery Sales
2006 v 2005
Grocery Retail
Market Share
*(%)
No. of
Stores
Sales
Area
(sqm)
Mercator*
1,619
1,378
+2.3%
34.90%
571
232,250
Spar International
553
553
+12.2%
14.48%
63
103,556
Engrotus*
526
526
+16.1%
13.12%
251
120,700
Aldi
100
100
-
2.62%
29
17,400
E. Leclerc
45
45
+7.1%
1.17%
1
8,300
•Grocery Retail Market Shares exclude cash & carry operations.
Data is for grocery formats only except Total Sales which includes non-grocery if applicable. Total Sales & Grocery Sales are
Net.
Data includes franchised operations where appropriate.
Source: IGD Analysis, Country Presentation, Slovenia, 2007
Slovenian Market
Facts
•
Slovenia’s accession into the EU led to an increase in foreign investment which
is set to continue into the coming years.
•
Mercator dominates the retail market and this combined with a small population
and a shortage of large cities could hamper retail development for hypermarkets
and supermarkets.
•
This is a very price sensitive market and as such there are a number of
discounters operating in the market.
•
Slovenia has an ageing population with the lowest fertility rates in Europe. The
average age in Slovenia is 40.6years and by 2050 it is estimated that over 30%
of the population will be 65+.
•
There are strict restrictions on retail trading hours with Monday – Friday shops
closing at 6pm and 1pm on a Saturday. Sunday has three rules - stores with
essentials can open up to 10 Sundays a year and small stores with essential
items at train stations, borders, petrol stations are allowed open. Everything else
is closed.
Foodservice
Establishments
•
McDonald’s
– Operate 15 outlets in the country.
– Entered the market in 1993.
– The only major international fast food chain operating there, though
Burger King are set to open in 2009.
Foodservice
Establishments
•
A number of operators have entered and subsequently exited the
market in Slovenia. Examples include:
– Subway who closed their single store in Ljubljana last year.
– Dairy Queen - were the first to enter the market and exited in the
late 1990’s.
– Quick also entered and exited the market (IFE Foodapest, 2008).
Reasons for targeting Slovenia
•
•
•
•
•
•
High concentration of organised trade predominantly Western European
owned relative to other Eastern countries
Highest level of disposable income per head of population of the Eastern
European accession countries
Slovenia is traditionally a gateway to the other markets of ex Yugoslavia
Over 50% of retail sales are in food (€4.25bn)
Member of Eurozone
Good opportunity for export of whiskey and spirits
Barriers/challenges in supplying
Slovenia market
•
•
•
Low level of Irish food exports currently to Slovenia
Small population (2m)
Large international foodservice operators have previously withdrawn from
the market with the exception of McDonald’s
Bord Bia services 2009
•
Bord Bia market mentor (Mr. Kieran Fahy) available for Eastern Europe market and
trade related queries:
•
Services include: Itinerary Development, Category Analysis, Media review and
translation services, Product Price auditing and tracking, Product retrieval, Buyer
networking, Distributor searches
Kieran Fahy
Sarospatak ut 32
1125 Budapest
Hungary
Tel: +36 706 144871
Email: Kieran.fahy@freemail.hu
Also: Liam MacHale
Bord Bia
Wöhler Str. 3-5
60323 Frankfurt, Germany
Tel +49 69 710 423 255
Email: liam.machale@bordbia.ie