Slovenia Market Overview. Bord Bia, Frankfurt November 27 th 2008

Transcription

1 Slovenia Market Overview Bord Bia, Frankfurt November 27 th 2008

2 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

3 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 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%

4 Irish Export Performance Irish Exports to Slovenia (2007) Fish 6% Beverages 41% Total value of exports: 1.2mn Vegetables and Fruit 14% Miscellaneous edible products 39% Source: CSO Food and Drink Statistics 2008

5 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 (e) ( ) ( ) ( ) Total Retail Market (billions) Grocery Retail Market (billions) Grocery Retail Spend/capita 1,900 2,030 2,140 Source: IGD Country Presentations, 2008

6 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)

7 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 6 th discount chain on the market. They operate 28 stores currently in Slovenia.

8 Retail Market Share SPAR 13% Engrotus 12% Aldi 2% E. Leclerc 1% Other 34% Mercator 38% Source: IGD Analysis Country Presentation Slovenia 2008

9 Retail Market Structure Top 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, % 34.90% ,250 Spar International % 14.48% ,556 Engrotus* % 13.12% ,700 Aldi % 29 17,400 E. Leclerc % 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

10 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.

11 Foodservice Establishments McDonald s Operate 15 outlets in the country. Entered the market in The only major international fast food chain operating there, though Burger King are set to open in 2009.

12 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).

13 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

14 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

15 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 Also: Liam MacHale Sarospatak ut 32 Bord Bia 1125 Budapest Wöhler Str. 3-5 Hungary Frankfurt, Germany Tel: Tel