Post on 29-Jun-2018
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
Source: CSO Food and Drink Statistics 2008
Irish Exports to Slovenia (2007)
Miscellaneous
edible products
39%
Vegetables and
Fruit
14%
Fish
6%
Beverages
41%Total value of
exports:
€1.2mn
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.
Source: IGD Country Presentations, 2008
2,140
4.25
7.98
2008 (e)
(€)
2,030
4.08
7.50
2007
(€)
1,900Grocery Retail Spend/capita
3.82Grocery Retail Market (billions)
6.97Total Retail Market (billions)
2006
(€)
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
Source: IGD Analysis Country Presentation Slovenia 2008
Mercator
38%
SPAR
13%
Aldi
2%
Other
34%
E. Leclerc
1%
Engrotus
12%
Retail Market Structure
Top 5 2006
Source: IGD Analysis, Country Presentation, Slovenia, 2007
17,400292.62%-100100Aldi
+7.1%
+16.1%
+12.2%
+2.3%
% Change
Grocery Sales
2006 v 2005
120,70025113.12%526526Engrotus*
103,5566314.48%553553Spar International
8,30011.17%4545E. Leclerc
232,25057134.90%1,3781,619Mercator*
Sales
Area
(sqm)
No. of
Stores
Grocery Retail
Market Share
*(%)
Grocery
Sales
(€m)
Total
Sales
(€m)
Retailer
•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.
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 Also: Liam MacHale
Sarospatak ut 32 Bord Bia
1125 Budapest Wöhler Str. 3-5
Hungary 60323 Frankfurt, Germany
Tel: +36 706 144871 Tel +49 69 710 423 255
Email: Kieran.fahy@freemail.hu Email: liam.machale@bordbia.ie