EUROPEAN CHALLENGES TO THE BULGARIAN RETAIL INDUSTRY
AND KOREA’S EXPERIENCE IN INTERNATIONAL RETAILING
Assoc.Prof. PhD. Septemvrina Kostova
University of National and World Economy– Sofia, Bulgaria
1.The review of the global retail market
The purpose of this study was to examine the evolution of retail institution
types in South Korea and Bulgaria with a proposed model. To examine the evolution
of retail institution types in South Korea and to develop a more universal research
model to explain this evolution, a qualitative research design was used. Specifically, a
modified grounded theory type of design, with a historical/ comparative analysis
method, was used in this study. First, the grounded theory process was used to
develop a graphical representation or model using information from previous
research. Second, the researcher collected publicly available data in South Korea’s
trade and industry associations, websites on the Internet. Through comparative
analysis, data from the South Korean retail industry were examined and compared to
the working model to help Bulgarian’s retail companies in their transition to the
global market. Four spiral endings were found: (1) upgrade, (2) stay and eventually go
out of business, (3) downgrade, and (4) change types of retail institution. In the
conflict part, a new retail institution type started competing with its own type, other
traditional retail institution types, and a new retail institution type. Environmental
influences affected not only the emergence of a new retail institution type but also the
conflict among retail institution types and the evolution process. In addition, a new
reciprocal relationship was found between environmental influences and a new retail
institution type and between consumer preference of store/product attributes and a
new retail institution type.
For future research, the CRM could be the base of research in many types of
retail institution and in any countries that have unique retail environments. Using the
CRM from this study of retail evolution in South Korea, current and future retail
institutions could predict both consumers’ changes depending on environmental
influences and what competitive advantages they must achieve to provide benefits to
these consumers. In addition, researchers, both academic and retail, could use the final
CRM to study the emergence and characteristics of a new retail institution type by
analyzing current retail institution types
The process which have been taking place in the retail sector for years, and
will continue to develop until it acquires a structure in keeping with global trends,
have been developing under the sign of Bulgaria’s accession to the European Union.
A growing body of business expertise opinion suggests that the entrepreneurial
behavior is essential for retail companies’ survival and growth as well as for the
enforcement of their global competitiveness, particularly in the transition period. In
order to face the intensifying competition in the global market, Bulgarian firms have
to adequately adjust their business practices actively searching for means in
reinforcing flexibility, increasing innovation capacity and, as a result, showing more
competition. Contemporary enterprises are not seemed to be able to survive in the
period of “rapid mutation and innovation” if they do not maintain the proficiency and
competence of entrepreneurs (P.Drucker, 1985). The strengthening of
entrepreneurship considers as a crucial key to Bulgarian retailing practices
convergence to EU standards, becomes an important objective for Bulgarian retailing
in the transition period. It is most relevant to all Bulgarian retail companies that need
to increase the level of their competitiveness in the global and changing environment.
Indeed, because of the relatively small size of 60% of Bulgarian retail firms, most of
them do not have the capabilities, market power. And other important resources
possessed by large companies. The success depends almost entirely on the quality of
the human capital, of the new modern distribution channels and the formulation and
implementation of the competitive retail strategies (M.Porter, 1980). The development
of the entrepreneurial potential and orientation in transition countries is considered as
a main instrument that is expected to provide their global competitiveness. In other
words, the entrepreneurs’ capability to seize new business opportunities will act as
major determinant of the establishment of a nation’s retailing competitive position on
the European market (S.Zahra, 1999).
The market share of the modern retail formats in Bulgaria increased in the last
years as it is shown in Figure 1. The trends are in positive direction but there are more
opportunities (free market place) for hypermarkets and discount stores.
Figure 1 Market shares of the retail formats
Format
2003
2004
Hypermarkets Supermarkets
10%
13,9%
Discount stores Cash & Carry 3,5%
3,8%
Stores
Neighborhood 61%
59,3%
Stores
Forecourt
2,0%
1,6%
….
…
…
Other Stores
23,6%
21,6%
2005
0,2%
17,4%
0,1%
3,9%
2006
0,3%
18,4%
0,1%
3,4%
60,8%
61,7%
1,4%
…
16,2%
1,3%
…
14,8%
The main strategies of the Bulgarian retail companies in the light of Bulgarian
EU accession and EU retailing standards adoption are presented by new formats, new
market distribution channels, concentration of trade locations, developing of ecommerce, straightening the scientific and technological base and encouraging the
international competitiveness. The local dimensions of the buyer behavior are
penetration, frequency and loyalty, which are investigated further, show the
household’s wants and wishes during the shopping.
There is a very interesting study made by A.Kearney (2006). On a regional
level, Bulgaria is besides from the maturing markets of Eastern Europe. The rest of
the world is in different condition. As part of Asia, South Korea posted the highest
retail sales growth globally, after China and Vietnam. The Mediterranean held
steady with mixed results, while Latin America recovered from its economic crises
and enjoyed a strong return on the Index. Finally, Africa remains outside the game,
but that is not stopping retailers from entering this populous region. Figure 2 maps
out the relative market attractiveness of all countries on the Index (GRDI). A closer
look at each region follows:
2.The Korean’s experience in international retailing
First some data about South Korea: population 48 ml, GDP $951, purchasing
power per capita 19,515, consumption growth 5,4. South Korea’s market ranks
relatively as the twelfth largest market in the world. The average sales per store are
$120,290,4. The relative retail market size is third after Chine and Japan. The first
hypermarket was built in 1993 by a domestic chain, E-mart and it is still the largest
company operating the format today. In 1996 after liberalization of its market South
Korea has attracted numerous overseas chains and Carrefour entered soon after. It was
then followed by Makro in a joint venture, and has since been joined by Costco, WalMart and Tesco. The entry of Carrefour added the concept of low price and
reasonable quality to Korean consumers and this has now become standard in the
market. In 2004 Lotte Mart overtook Carrefour in terms of store numbers, pushing it
to number three. Carrefour was criticized by Korean press for being global company
and for not taking enough account of differing Korean consumer culture.
Korea remains a difficult market for imported food products to penetrate. The
private label brand gives a foreign company an inside track into the market, since
most of the work is done by the customer and not the manufacturer. In some of the
comments on the interim report there seemed to be some confusion as to whether a
private label brand produced in one country could carry over into another country.
While at first sight a Walmart or Carrefour private label product might appear to be
available to be sold in many markets, packaging regulations and taste may make a
product produced for say the USA, less attractive in Korea. This is a matter of
negotiation between the manufacturer and the commissioning customer, and Canadian
companies are urged to prompt their customers to see if this is an option.
Koreas retail food sector rides a tidal wave of change. Picture retail food
outlets -hypermarkets - that claim daily visitor counts ranging from 10,000 to
300,000, and you have an idea of the humongous opportunities in Korean food
retailing today. Add to this an increasing taste for imported food and an affluent
consumer base, and that is the reason why U.S. firms are coming down with Korean
export ecstasy. Things there were not always this rosy in retailing. Until the early
‘90s, the only places to buy groceries in Korea were "mom & pop" stores, open-air
wholesale markets or the so-called supermarkets at department stores. But now that
discount stores and membership-warehouse outlets are on the scene, food retailing
will never be the same. And that spells opportunity for U.S. exporters. Not only is the
national appetite for imported foods larger than ever--it keeps on growing. In 1996,
Korea became the fourth-largest market for U.S. agricultural exports. Meanwhile,
what’s become of the traditional leaders in food retailing like Lotte, Samsung and
Lucky Star? All have developed their own discount spin-offs, as have lesser known
Korean groups. Foreign groups are taking advantage of recently liberalized
investment policies to muscle into the market. Price Club, Carrefour and Makro have
established Korean discount stores, all reportedly profitable. Most strikingly, virtually
all these stores plan to expand, increasing both volume and percentage of imported
food and beverages. Many firms with only a few outlets today aspire to opening
dozens across the country by the year 2000, pushing the entrepreneurial envelope and
increasing competitiveness. Thus, Koreans can buy in increasing high volume and,
more often than ever these days, in bulk. Vast shelves invite customers to partake of
many options, including multiple brands of similar products. Now that, for the first
time in history, Korean retailing is a buyer’s rather than a seller’s market, the rush is
on to improve infrastructure. And improvement is certainly needed. Everything from
clogged ports and bumper-to-bumper traffic to acute shortages of refrigerated and
frozen storage serves to limit sales volume and increase the costs of imports at this
time. Stores are taking such steps as building or renting their own storage. Some are
large enough to act as their own warehouses. Many are seriously considering direct
imports, although this is still in limited practice--a hesitation that may be due to
inexperience in international trade. Like other importers, hypermarkets that import
directly are subject to both transparent and nontransparent anti-import policies that,
despite reform, still beset Korea.
Until now, most hypermarkets have required that importers take all risks-from goods clearing customs right up through sale--while others have insisted the
importer or manufacturer pay to place products in the store. A few even require the
importer to supply personnel to help sell--personnel who may be used as store-wide
sales clerks. Although they are making strides, Korean merchants remain frustratingly
unfamiliar with the practice of placing advance orders for products that sell well.
Some stores continue to expect to sell imported food products on a consignment basis
only. And in-store promotion is a concept that is not yet universally understood. Many
Korean purchasing managers openly worry about the risks and hassles of customs
clearance and shelf-life, as well as the risk of failing to please customers. But the
pressure is on Korean retailers to produce. As a result, old practices are giving way,
though at times grudgingly, as growth-obsessed hypermarkets continue to turn the tide
of Korean retailing.
Korea’s large, affluent, educated consumer base is packed into a country the
size of Indiana. With a population of 46 million, Korea has the world’s tenth-largest
economy. Increasingly Westernized tastes contribute to a falling consumer resistance
to imported food products. Koreans are among the most traveled people in the world;
many have eaten foreign food for years. Aggressive marketing by exporters and
importers coincides with increased demand for high-quality foods that are a good
value. And trade barriers are coming down. A member of the World Trade
Organization and the Organization of Economic Cooperation and Development,
Korea is committed to reducing or eliminating import restrictions on a wide range of
foods and beverages.
Tips for Exporting to Korea are different. It’s difficult to overemphasize
the importance of establishing good relationships with importers and retailers in
Korea. Having a strong product line is, of course, important. But equally so are your
hard work and patience. Even if you are not selling directly to retailers, visit them
anyway. The time may come when you will. Double-check the credentials and
capacity of an exporter. Because so much in Korea depends on the importer’s
relationships--from clearing products through customs to securing adequate storage
space--you’ll want to ask questions such as how much experience the importer has
had with products like yours and who will be targeted as a customer. Most exporters
agree to exclusive distribution contracts with a single importer for a specified length
of time. In return, the importer works to develop and tap a market. The Korean diet is
very different from the western diet, and many of the processed foods eaten by a
Korean are not currently produced in the west. The report covers the full scope of the
Korean processed food and beverage market, since to concentrate on purely western
foods would give a misleading view of the range of products involved. Processed
foods are taken to mean dried vegetables, frozen products as well as other packaged
food or beverages. Private Brands are defined as products produced by third parties
which are branded by stores with their own store name or store brand name. Thus
Hanwha Shopping a leading supermarket chain markets the "Good and Cheap" range
of products involved. Carrefour markets under the Carrefour brands. In Korea these
are known to the trade and to some consumers as "Private Label Brands". Most
brands are also used for other fast moving consumer products. In conclusition, with
these limitations, the historic evolution and current structures of retail institution types
in South Korea, on the surface, appear to be very different from the evolution and
structure of retailing in the Western hemisphere. Several reasons for this difference
appear to involve the unique features of South Korea and its culture: retailing types
were imported to South Korea within a very compressed time period, unique
geography includes small land size and high population concentration in South Korea,
the government control and the political insulation of South Korea are different from
Western cultures.
3. The future development of Bulgarian retailing
The most important global trends for Bulgarian retail companies can be
assumed in three groups:
1/ Traditional trends with features as: daily shopping, staple goods, local
products where are founded formats like neighborhood stores, convenience stores and
drugstores. This is most famous retailing for Bulgaria (over 60%).
2/ Transnational trends with features as: enter of modern retailers, more world
brands, spend of non-food ware increases, processed food increases. The European
chain stores Metro, Billa, Kaufland, Hit, Praktiker exist on Bulgarian market since 6-7
years. In 2006 were opened 4 big malls: City Center, Mall of Sofia, Sky City in Sofia
and Central Mall in Veliko Tirnovo.
3/ Aspiration trends will exist in the future: Modern retailers dominate with
health and luxury products. They will possess high quality and the consumer
convenience will be the most important purpose for all retailers. Global top retail
companies like Carrefour, IKEA and Zara will expand in the Bulgarian market very
soon.
According market research of “ACNielsen- Bulgaria” the changes of the retail
formats in the last 2 years show following rates (Figure 3):
Figure 3. Number’s changes of stores by formats in Bulgaria Jan.2005 – Jul.2006
Size of the stores
Supermarkets – over 300 m2
Stores (101-300 m2)
Stores (41-100 m2)
Middle stores
Little stores
Mixed Stores
Drugs
Change in %
13,7
3,9
2,0
3,6%
-4,9
-20,9
0,5
The structure of the retail formats in Bulgaria is not good. The small food
stores dominate. A comparative analyses with other Balkans countries has a following
picture (figure 4):
Figure 4.Structure of Retail formats in 2005 in several Balkan countries (in%)
Retail formats
Hypermarkets
Supermarkets
Discaunt stores
Cash&Carry
Food (little)
Drugs stores
Door-to-Door
Street vendors
Others
Bulgaria
0,6
18,4
0
3
64
1
0
1
12%
Romania
2
16
1
1
49
0
4
1
16%
Serbia & MN
2
18
2
1
63
0
3
5
6%
Croatia
3
33
5
8
31
4
2
4
10%
The main players in Bulgarian retailing are the retail chains Fantastiko, CBA,
Picadilly, which with the international groups REWE, Schwarz and Migros lead on
the market and gain more and more customers. The results of recent survey (2006)
show that 3,7-3,8 from the families purchase in hypermarkets at least once in the
week. The comparative analyses between shopping in supermarkets and hypermarkets
is made in the figure 5:
Figure 5. Dimensions of shopping
Dimensions
Penetration (number from
householders)
Frequency (visits in the
shop during the period)
Loyalty (value share)
Hypermarkets
3,8
Supermarkets
57,2
5,4
25,2
5,5
25,7
The limits of the research are two: first - the products – FMCG (fast moving
consumer goods) and second – the period – 1 month (September 2006). The buying
behavior in Bulgarian householders is characterized with frequent visiting the small
neighborhoods stores and 1-2 a week in supermarkets. The shopping in hypermarkets
is an exception in Bulgaria. The people purchase in the hyper very rarely because the
hypermarkets are very few and stay at a long distance. The analyzed period is one
month in 2006. The average number of purchase act in a store is a frequency – 5 times
higher in the super than in the hypermarkets. The loyalty is defined as a value share of
FMCG bought in the hyper/ super on total value by the number of the buyers. The
trend is increasing loyalty to the specific supermarket in the neighborhood.
The loyalty can be proved with the retail private labels. The retail brands
become more famous. This is the world trend but does not happen on the Balkan. The
next figure shows the difference.
Figure 6. The famous producer’s brands and private labels (structure in %)
Countries
Austria
Czech
Poland
Bulgaria
Romania
Producer’s brands
73%
83%
85%
97%
99%
Private labels
23%
17%
15%
3%
1%
The entrepreneurial retailers take advantages of the environment by focusing
on niches. Hence, irrespective of psychic distances they standardize their formats.
They adapt only when the environment forces them to adapt on account of new
opportunities or a crisis situation. Their route to innovation is problem initiated and
hence their innovation is a radical departure from the status quo. Finally, to conclude
retailing systems in emerging countries differ markedly from those in more developed
systems on account of the large concentration of small neighborhood stores (Saimee,
1993). Retailing literature in the past has concentrated on the large format organized
retailers. The classificatory schema provided in this study does not discriminate
retailers on the basis of size. Hence, an opportunity has been provided for future
research in developing countries such Bulgaria where retailers can be studied
irrespective of their size and level of organization.
4. A Window of Opportunity (Bulgarian’s Global Retail Development Index)
Analyses of data for the period 1995-2006 show as follows: The Global Retail
Development Index was first developed in 2001. Last year data from 1995 to 2000 are
gathered to recreate the Index for this time period, and expanded to 2006. In analyzing
global retail trends over the past 11 years, was found that market attractiveness
generally follows the same consistent pattern, that certain formats are most
appropriate for certain stages of market development, and that modern retail
contributes to a market’s overall success. The lessons learned are as follows:
Windows of Opportunity Last 5 to 10 Years
Market attractiveness usually follows the same consistent pattern. Markets progress
through four stages as they evolve from an emerging to a mature market, usually over
the course of 5 to 10 years (see figure 7). This model is particularly useful as
executives plan their market-specific strategies, giving them insight into timing and
allowing for better strategic decision-making. The four stages are:
Opening. An opening market is one that is just entering the GRDI or is just outside
the top 30 markets. At this stage, retailers should be monitoring the market and
performing high-level assessments. They should also begin planning their entry
strategies and send task-force teams in, if necessary. Patience is strategic key, as
entering too early can lead to failure. India in the late 1990s is a good example of a
country in the opening stage, while in 2006 Kazakhstan is the country to watch.
Bulgaria was in Opening stage in 2002.
Peaking. A peaking market is developing quickly and is ready for modern retail. At
this stage, retailers should enter the market through sourcing offices, local
representation and new stores. Current peaking markets include Ukraine, India and
Vietnam. Retailers that enter during this stage have the best chance for long-term
success. Wal-Mart and Carrefour’s success in China in the late 1990s and early 2000s
illustrates the importance of committing to a promising high-growth market at the
right time. Today, Wal-Mart and Tesco are adopting the same strategy in India—
testing the market conditions before diving in. Looking ahead to 2011, don’t be
surprised if Wal-Mart and Tesco are among the top three international retailers in
India. The peak for Bulgaria was 2003-2005.
Declining. The declining stage is when the market is still big and growing, but the
space for new entrants is becoming tighter—and retailers must act quickly. China is a
good example. Wal-Mart, Tesco and Carrefour have established their presence in the
primary hubs, and are now focusing on tier-two cities. Retailers entering a declining
market have limited time to explore, and their margin for error is thin. In general,
they must play by established rules and be prepared to deal with more competition
from other international retailers.
Closing. The window of opportunity is closing fast. The share of modern retail is
very high, reaching 40 to 60 percent. Most Eastern European markets, including the
Czech Republic and Poland, are in this phase. Though the opportunity is closing,
retailers can enter with new formats such as discount models, or non-food formats
such as consumer electronics and apparel.
A window of opportunity lasts about 5 to 10 years before a market enters the closing
phase and reaches saturation levels close to developed markets. Bulgaria, for
example, was in the opening stage in 2002, entered the peaking stage in 2005 and
will decline in 2009. We expect Bulgaria to remain in the peaking stage for two to
three years and then begin to move into the declining stage. While wave 2 formats
such as hypermarkets (and eventually malls) and discount stores could succeed in
later stages, the ability to earn significant market share and profits is limited and
competition is fierce.
However, there are two exceptions to this rule (see figure 8). First, markets that join a
regional or economic community, such as the World Trade Organization or the
European Union, tend to develop more quickly. Retailers often rush to a market just
before it joins such groups to take advantage of the benefits membership will
eventually provide—and saturate the market in the process. For example, recent
entrants in the European Union—Latvia, Lithuania, Slovakia and Hungary—have
moved from the peaking stage to the declining stage far more swiftly than have other
emerging markets. Bulgaria and Romania are now in their peaking stage but it will
last only several years.
A regional economic crisis can also alter the typical timeframe. Latin American
countries, for example, suffered a severe economic downturn in the early 2000s but
made a strong comeback this year. We expect these countries to follow the window of
opportunity curve, but on a faster trajectory.
Retailers can use the window of opportunity analysis to formulate specific actions on
entry timing, entry strategy (joint venture, organic growth, acquisition), entry format
(cash and carry, discount) and human capital strategy. Going further, this analysis can
also be tailored to specific retail segments. We are expecting the Bulgarians entry in
EU to enforce the process of retail globalization in the country.
Formats Should Align with Market Stages
As companies time their entry into a new market they must also consider what format
will work best (see figure 9). In markets that are emerging or peaking, supermarkets
and cash and carry formats are the most successful. Forcing an unfamiliar format onto
a new market generally doesn’t work. In India, for example, where space is limited in
the larger cities, Tesco is introducing a smaller store under the Magnet banner.
Entering a market in the declining or closing stages inherently means increased
international competition, but choosing the right entry format in the right window of
opportunity could provide sizeable market opportunities. Metro launched several cash
and carry outlet stores in Ukraine, which is in the early part of the declining stage;
Lidl is opening a series of discount store in Latvia, which is in the closing stage.
In these final stages, seasoned consumers enjoy a broad variety of shopping
experiences. Although no format is off-limits, targeting the best one becomes riskier.
When modern retailers saturate a market, a new entrant must have very specific plays.
Tesco, for example, is making a highly publicized move into the United States - a
very mature market - with a very specific format.
As retailers select the best format for a new market, however, they must also tailor it
to local tastes and expectations. For example, when U.K.-based B&Q moved into
China, it created the buy-it-yourself model, which is a more personalized,
comprehensive format than the traditional do-it-yourself approach. The difference
stems from the fact that most apartments in China are sold as empty shells, requiring
new owners to completely finish the space. Carrefour also changed most of its floor
plans for its stores in China. Overall, the only formats that remain similar across
regions are those with strong lifestyle and brand images, such as Gap and Starbucks.
The fashion of investments in Bulgarian Retailing can be expressed with only
one world “maxi” fashion of the malls’ building. At the end of this year the number of
the malls is expected to increase to 19 (now there are 4). The calculated purchase
power is about 20 malls with parallel exist of many supermarkets, hypermarkets and
special stores. The relative economic weakness of Bulgaria will be undergone by the
benefits of membership in EU. The economic evidence indicates that Bulgaria has
made considerable progress in satisfying Copenhagen criteria. The retail performance
gap can be significantly reduced by innovations in retail formats in Bulgaria.
References
Drucker, P., (1985). Innovation and Entrepreneurship. NY: Harper & Row
Porter, M. (1980). Competitive Strategy. NY: Free Press
Zahra, S. (1999). The changing rules of global competitiveness in the 21st century.
Academy of Management executive, 13, pp.36-42
Samiee, S. (1993), “Retailing and Channel Considerations in Developing Countries:
A Review and Research Propositions,” Journal of Business Research, 27, 103-130.
Solberg, Carl. Arthur, (2000), “Educator Insights: Standardization or Adaptation of
the International Marketing Mix: The Role of the Local Subsidiary/Representative,”
Journal of International Marketing, 8 (1), 78-98.
Theodosiou, Marios & Constantine Katsikeas (2000), “Factors Influencing the Degree
of International Pricing Strategy Standardization of Multinational Corporations,”
Journal of International Marketing, 9 (3), 1-18.
Waheeduzzaman, A & Leon Dube (2004), “Trends and Developments in
Standardization Adaptation Research,” Journal of Global Marketing, 17(4), 23-51.
Statistical Analysis of Central Intelligence Agency and International Monetary Fund
(2005)
Carrefour Annual Report, 2005
Carrefour announced a withdrawal from South Korea in 2005
Data adapted from Euromonitor (2006)
http:// www. A.T.Kearney. Global Retail Development Index. (2006)
http:// www.ACNielsen.com
Abstract
The purpose of this study was to examine the evolution of retail
institution types in South Korea and Bulgaria with a proposed model
(GRDI). To examine the evolution of retail institution types in South
Korea and to develop a more universal research model to explain this
evolution, a qualitative research design was used. Specifically, a
modified grounded theory with a historical/ comparative analysis
method was used in this study. In conclusion, with these limitations,
the historic evolution and current structures of retail institution types in
South Korea, on the surface, appear to be very different from the
evolution and structure of retailing in the Western hemisphere. Several
reasons for this difference appear to involve the unique features of
South Korea and its culture: retailing types were imported to South
Korea within a very compressed time period, unique geography
includes small land size and high population concentration in South
Korea, the government control and the political insulation of South
Korea are different from Western cultures. A new retail institution type
has emerged in South Korea that is unique in comparison to any
previous retail institution type. The study of this emergence and its
growth has implications for the future structure of retail both in South
Korea and in Bulgaria.
The entrepreneurial retailers take advantages of the
environment by focusing on niches. Hence, irrespective of psychic
distances they standardize their formats. They adapt only when the
environment forces them to adapt on account of new opportunities or a
crisis situation. Their route to innovation is problem initiated and
hence their innovation is a radical departure from the status quo.
Finally, to conclude retailing systems in emerging countries differ
markedly from those in more developed systems on account of the
large concentration of small neighborhood stores. Retailing literature
in the past has concentrated on the large format organized retailers.
The classificatory schema provided in this study does not discriminate
retailers on the basis of size. Hence, an opportunity has been provided
for future research in developing countries such Bulgaria where
retailers can be studied irrespective of their size and level of
organization. The fashion of investments in Bulgarian Retailing can
be expressed with only one world “maxi” fashion of the malls’
building. At the end of this year the number of the malls is expected to
increase to 19 (now there are 4). The calculated purchase power is
about 20 malls with parallel exist of many supermarkets, hypermarkets
and special stores. The relative economic weakness of Bulgaria will be
undergone by the benefits of membership in EU. The economic
evidence indicates that Bulgaria has made considerable progress in
satisfying Copenhagen criteria. The retail performance gap can be
significantly reduced by innovations in retail formats in Bulgaria.