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CCA Groceries Retail Market Inquiry for 2020: Retail turnover exceeds HRK 40 billion Konzum plus remains leading groceries retailer

The Croatian Competition Agency (CCA) carried out the Groceries retail market investigation (including food, beverages and sanitary products for households) in Croatia for 2020.

The total sample included 51 undertakings. Compared with the previous year there were two undertakings that have been subject to acquisitions (Sonik Trgovina was acquired by Studenac, Sloga Podravska Trgovina by Lonia) whereas there was one new undertaking included in the sample – Eurospin Hrvatska that opened its first supermarket in Zadar in August and six more later in 2020.

The realized turnover of all the undertakings that were included in the market investigation for 2020 amounted to more than 40 billion Kuna, which actually means that the groceries retail turnover has risen by HRK 306 million in comparison with 2019 despite the global covid-19 pandemic and partial lock-downs. The rise was moderate (in 2019 compared with 2018 it had been HRK 2.25 HKR billion or 6 %).

The market inquiry indicated the rise in the total number of outlets by 0.3 % (4.707 outlets or 14 more than in 2019) and the fall in the net sales space by 1 % (1.44 million m2) compared with 2019.

Market structure and trends

The leading groceries retailer in 2020 was Konzum plus. It held a market share of 20 % to 30 % that actually fell in 2020. Konzum plus had a total of 608 outlets in 2020. In October 2020 it launched its web shop in partnership with Uber.

In 2020 the members of Schwarz Grupa kept but a more moderate rising trend. Lidl recorded a mild increase in retail turnover. The market share of Lidl was 10 % to 20 %. The other member of Schwarz Grupa – Kaufland also recorded a moderate rise in its turnover whereas its market share was 5% – 10%. Both members of Schwarz Grupa together held a combined market share of 20% – 30%.

In 2020 there were 30 undertakings recording a turnover rise in groceries retail compared with 38 of them in 2019. However, 21 retailers recorded a falling turnover trend, in other words, a fall in their turnover in comparison with 12 with a falling turnover trend in the year before. The highest nominal turnover rise in 2020 was recorded by Plodine, followed by Spar, Lonia trgovina, Lidl, Mlin i pekare and Studenac. Lonia increased its turnover by acquiring Sloga Podravska Trgovina and its 70 outlets, whereas Mlin i pekare leased 23 outlets of Trgonom in spring 2020. Besides its organic growth Studenac turnover rose due to the acquisition of some 80 outlets of Sonik Trgovina.

In 2020 the following regional retailers increased their turnover: Mlin i pekare, Boso, Slavonija-Bošković, Gavranović, Decentia and Robin. The line-up of the leading retailers has not changed compared to 2019 apart from the fact that Lonia trgovina took over the tenth position on the top-10 list leaving Mlin i pekare behind. In other words, with respect to the realized turnover from the groceries retail Lonia has come back to the top-10 list for the first time since 2017.

Decline in asymmetry and moderate rise in market concentration

Asymmetry in the retail market declined further in 2020, in other words, the discrepancy between the leader in the market Konzum plus and its second rival Lidl has been diminished.

Compared with 2019 the report year showed a mild rise of the concentration ratio CR10 (the market shares of the 10 biggest retailers in the market), that was 82.7 in 2019 and 83.4 in 2020.

The results of the analysis of the five-top-rivals (CR5) indicate that the concentration ratio slightly rose to 66.1 in 2020.

Regional overview

Counties and the City of Zagreb

In contrast to the previous year, when all regions of Croatia (20 counties and the City of Zagreb) recorded the turnover rise, in 2020 the rise was recorded in 13 counties and the City of Zagreb.

The highest groceries retail turnover was achieved by the City of Zagreb (HRK 7.5 billion), Split-Dalmatia County (HRK 5.1 billion) and Primorje-Gorski Kotar County (HRK 3.5 billon). Other counties scored less than HRK 3 billion in retail turnover in 2020.

Nevertheless, the drop in the groceries retail turnover was recorded in 2020 in seven counties located on the Adriatic coast, including Lika-Senj County where retailers operate in several coastal towns (Senj, Karlobag, Novalja). It is evident that the retail turnover fall was caused by the decrease in tourism figures due to covid-19 pandemic and the lock-downs. Compared with 2019 the turnover drop was the sharpest in Istra, Split-Dalmatia, Dubrovnik-Neretva and Šibenik-Knin County.

The majority of retailers on the Adriatic coast recorded a drop in their turnover, some of the national ones, too. This drop has been partially compensated by the rise of the turnover in the continental parts of Croatia, such as in the City of Zagreb, Zagreb County and Osijek-Baranja County.

It must be noted that in 2020 Zagreb County took the fourth place on the list which used to be taken in 2019 by Istra and Zadar County.

The City of Zagreb and six counties (Split-Dalmatia, Primorje-Gorski Kotar, Zagreb, Istra, Zadar and Osijek-Baranja County) made up for almost two thirds or 64.9 % of the total retail turnover in the Republic of Croatia in 2020, which has been the on-going trend for years now.

In the City of Zagreb, Zagreb County, Krapina-Zagorje, Varaždin, Karlovac, Lika-Senj and Osijek-Baranja County, Konzum plus was the leader. However, it lost its leading position in Dubrovnik-Neretva County where it was overtaken by Tommy.

The members of Schwarz Grupa were leaders in four counties, whereas Lidl was first in Koprivnica-Križevci and Bjelovar-Bilogora County. Like in the year before Kaufland was the leader in Brod-Posavina and Požega-Slavonia County.

Cities of Split, Rijeka, Osijek

In Split, Tommy remained on place one but decreased its market share. Compared with 2019 Split indicated a slight fall in groceries retail turnover in 2020, most likely linked with the fall in tourist turnover due to the pandemic.

The leader in Rijeka – Plodine, strengthened its position while all the groceries retailers here increased its turnover.

In Osijek, Konzum plus remained the biggest retailer while all the groceries retailers here increased its turnover as well.

Results of 2020 Groceries retail market investigation

The retail market investigation for 2020 indicates that the highest nominal rise in the realized turnover in the amount of almost HRK 227 million compared with 2019 was recorded by small shops. For the sake of comparison, the rise had been HRK 65 million in the reference year of 2019 compared with 2018. This is undoubtedly caused by the change in the habits and preferences of the consumers in the time of the pandemic and the restrictions that made them turn to the convenience stores around the corner.

Big format shops have been keeping the lead both regarding the realized turnover and the net sale space they occupy. The consumers still tend to shop in hypermarkets and supermarkets – more than two thirds or 71 % of the total groceries retail turnover was realized in big format shops, some 49 % in supermarkets and 22 % in hypermarkets.

Similar as in the previous year, self-service stores held the share of 43 % of all retail outlets, 39 % share was held by the small shops, 15 % by the supermarkets and 3 % by the hypermarkets.

The market inquiry for 2020 indicated that the net sales space was taken predominantly by supermarkets – 47 % of the total net sales space, followed by the hypermarkets with 23 % of the total net sales space. This is not surprising given the fact that supermarkets and hypermarkets logically occupy the largest net sales space in general. The self-service shops held the share of 22 % and small shops 8 % of the total net sales space.

On-line shopping and loyalty programmes

For the first time 2020 CCA’s Groceries Retail Market Inquiry has been extended to include web shops and loyalty programmes of the grocery’s retailers included in the investigation.

The results of the inquiry showed that groceries on-line shopping did not make a significant share in the total turnover structure of the groceries retail shops. The highest amount in the on-online groceries retail turnover was recorded by Konzum plus. However, it must be noted that only six retailers submitted their on-line sales data i.e., the figures realized on their own digital platforms. However, compared with 2019, the on-line sales in 2020 have risen significantly for the biggest retailer with its own web shop Konzum plus.

Loyalty programmes were applied by 14 out of 54 retailers included in the survey. Konzum plus and Kaufland had the highest number of members in their loyalty reward programmes.

Please click here click here for a detailed version of 2020 CCA’s Groceries Retail Market Inquiry in the Croatian language.