Germany’s Tengelmann Discount Store Opening First Outlet in Russia…..150 Planned

Posted: February 25, 2015 in Econ 101, Free Trade, Sanctions on Russia Meaningless

SOURCE: http://retailanalysis.igd.com/Hub.aspx?id=23&tid=3&nid=13584

SEE ALSO:  Starbucks Expands Outlets in Russia


.

Tengelmann entering Russia with Plus discount
23 February 2015

Having divested from Central Eastern Europe (Poland, Czech Republic, Slovakia, Hungary, Greece, Romania and Bulgaria) between 2007 and 2010, Tengelmann’s Plus discounter is returning, launching its first store in Russia.

Focus on Central Russia

With an investment of EUR500 m, Tengelmann plans to open around 150 Plus stores in Central Russia by 2020. The first three stores will be opened in the cities of Kaluga, Tula and Podmoskovye. In total the retailer plans to open around 10 stores in the Tula region. Further stores openings are planned for Tver, Nishnyi Novgorod and Pushkino.

Plus discount stores will offer around 2,500 items, including fresh product categories, food, health & beauty products, but also non-food ranges like toys and clothing.

Our view

Central Russia has massive potential for new store openings as consumer spending is above Russia’s average and competition is still low. Nevertheless, Magnit, X5 Retail Group and Dixy Group will be expanding in this region too; X5 Retail Group has already launched a new Pyaterochka discount concept. (see our store visit here)

Russia’s poor economic outlook offers an opportunity for a discount concept like Plus. However, Plus will have to come up with a different strategy than it pursued in Central Eastern Europe a decade ago. It will have to rely on local producers and imports from non EU countries as the ban on imports of certain fresh product categories has not been lifted. Local sourcing of private label products rather than their import from EU could be a challenge.

.

Tengelmann Structure

The corporation has the following subsidiaries:

SOURCE: http://en.wikipedia.org/wiki/Tengelmann_Group

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s