Caucasus

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Goodwill: Georgia’s first hypermarket chain to focus on premium products

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Goodwill Ltd “never compromise on quality,” according to its commercial director Beqa Petriashvili. By 2015, the retailer had opened 7 hypermarkets: 4 in Tbilisi and 1 in Rustavi, Gori and Batumi each. And this year, the company is going to open 2 new hypermarkets.

“We sell 50,000 SKU in our stores; 25% of the products are produced for us by local suppliers and we import another 25% directly ourselves. This enables us to guarantee high quality and freshness as well as the best processes,” said B. Petriashvili.

“We are going to increase the share of direct imports. As the result, we will be independent of distributors, control the whole logistics process and optimize prices.”

The main exporting countries for Georgia are Turkey and Iran, due to the country’s location (Tbilisi is 2,000 km from Istanbul and the goods are delivered by sea).

At the same time, after the introduction of an embargo in Russia, European exporters began to look for new markets and Goodwill is getting offers from them every day.

Modern Retail since the 2000’s

The modern retail sector is quite new in Georgia. The first chains opened in 2000 and their share does not exceed 15%. However, it has been developing very quickly and the competition has been toughening. This is why Goodwill has made a commitment to quality; its customers know they can find innovative products and specialties.

“We are glad to introduce novelties for our clients and we will diversify the sources of our range,” Petriashvili said.

NB

This article is from issue 137 of Eurofresh Distribution magazine. Read more free content from that edition online here.

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What’s happening with retail in Caucasus

There’s been significant growth in the retail sector in Belorussia

 

There are some 4,000 stores of different formats in Tbilisi, the capital of Georgia. Modern retail is not more than 30% of total trade. The share of supermarkets does not exceed 5% of the market, and the growth of their share is not expected in the near future.

The situation is similar in Armenia though in Azerbaijan the supermarket share is greater – 10%. One of the youngest retailers of Azerbaijan is resco; it is an affordable brand with high quality products for demanding consumers. Fresco is part of the Azeri Retail company which appeared on the market in 2010.

In January–November 2014, Azerbaijan imported 12,800 t of fruit at a value of $9 million, down 31% on 2013.

But fresh vegetable imports grew 26% (22,600 tons at $2.4 million) and potato imports – which totalled 110,000 t with a value of $8 million – were 2.5 times higher than in 2013, according to the Interfax.az agency.
 

Consolidation of formats by Belarusian retailers

There’s been significant growth in the retail sector in Belorussia – more than 18% in 2013 (on 2012) and 10% in the first half of 2014.

Though lately the growth has been slowing due to a general business decline, analysts are optimistic about the long-term prognosis of retail growth in Belorussia because the procurement of trade space is still quite insufficient – it is 1.5-2 times less than the EU average. Moreover, the shortage of some formats is so great that consumers from small towns have to shop in the country’s capital, Minsk.
The main trends in Belarusian retail sector at the moment are the consolidation of formats and the optimisation of trade processes.


X5 Group’s turnover higher

In the last quarter of 2014, the retailer X5 Group opened two new distribution centres: one of 34,000 m2 in the Rostov region (south of Russia) and another of 44,000 m2 close to Nizhniy Novgorod (Volga region).

Its turnover grew in 2014 thanks to inflation, new outlets and an assortment upgrade, especially in discount formats.

However some stores were also closed: 46 Pyaterochka discounters, 22 Perekrestok supermarkets, 45 Express supermarkets and 2 Karusel hypermarkets.
 

Magnit conquers Siberia

This year, Magnit, the largest Russian retailer, will open a new logistics and distribution centre near Krasnoyarsk. The retailer has bought 50 ha for this purpose. Additionally, new stores, both supermarkets and hypermarkets, will open in the region.
 

O’Key opens a new storehouse

The retailer O’Key is improving its logistics efficiency in Siberia and has rented a storehouse in Novosibirsk.

Until now, its merchandise distribution was done through four centres: in St. Petersburg, Moscow, Krasnoyarsk, Volgograd. Thus, the expansion of all the federal retailers to Russian regions continues.