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Oct 05, 2009 15:54 EEST
October 5 (SeeNews) - Newcomer discount retailer Plus, part of German group Tengelmann, expects to grab a 10% share of the Bulgarian retail market in five years thanks to its wide expansion plan, a senior official said on Monday.
"In the mid-term perspective, if we can reach a 10% market share in the next five years we would be happy," the chief financial officer of the retailer's local unit, Petar Dundev, told SeeNews on the sidelines of a news conference marking the company's entry on the Bulgarian market.
"We have a product range which covers any group of consumers on the domestic market," Dundev said. The company plans to offer a wide range of approximately 3,000 products in all price segments.
It will officially open its first six stores later this week, in the smaller Bulgarian cities of Pernik, Gorna Oryahovitsa, Sevlievo, Harmanli and Silistra.
Since 2006, when it set up its local unit Plus Bulgaria Trade, the group has invested 150 million levs ($112.1 million/76.7 million euro) and created 340 jobs. It plans to invest an additional 50 million levs by the end of this year in 19 stores and open 400 more jobs.
Plus plans to open 25 stores in Bulgaria a year. It has earmarked 70 million levs for investment in new stores next year.
"Our estimates show that the market has the capacity to host 130 of our stores," Dundev told the news conference.
The retailer's total investment plan for Bulgaria stands at 600 million levs, including a 30 million euro investment in a logistics centre near Sofia. Currently the company is the tenant of two logistics centres.
"The project for the logistics centre is under way. We expect it to be ready somewhere in the middle of our long-term business plan," Dundev said and added that the company could consider building a second logistics base at a later stage as it will need at least two centres to serve its operations.
Plus plans to employ 2,600 people in Bulgaria at the end of its 600 million levs investment programme.
Tengelmann Group operates in 15 European countries, where it has almost 7,500 branches, 116,447 employees, and annual sales of almost 20 billion euro, according to data from its website.
The main players on the Bulgarian retail market are Piccadilly, owned by Serbia's Delta Maxi, the local units of Slovenia's Mercator, France's Carrefour, Germany's Kaufland, discount supermarket chain Lidl, Metro Cash & Carry and HIT, and Lithuania's Maxima, as well as smaller Bulgarian players like Fantastiko. No data is available on the market share of those retailers. Germany's Penny Market has also announced plans to enter Bulgaria in 2009.
(1 euro = 1.95583 Bulgarian levs)
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