War in Ukraine forces Russian discount chain Mere to retreat

Russian discounter Mere is putting an end to its European expansion plans. The Russian invasion in Ukraine has made the climate unfavourable for the newcomer, which is also struggling to find suppliers.

Empty shelves

Mere, a Russian hard-discounter that operates under the name Svetofor in its own country, announced major European expansion plans in the spring of 2021: the chain wanted to open hundreds of stores, which would distinguish themselves by ultra-low prices. The company secured several locations in Belgium, France, Spain and the United Kingdom. Only a handful of these actually opened.

Now the curtain seems to have finally dropped: Mere is closing its only British store, in Preston, within two weeks. Further planned openings are being cancelled. The retailer has informed its suppliers and employees, The Grocer reports. Mere refers to the “political situation” after the Russian invasion of Ukraine. This makes it difficult to continue doing business in the UK.

The company’s initial ambition was to open as many as 300 shops there, but the launch was particularly difficult: the discounter had the greatest difficulty finding suppliers, even long before the Ukraine crisis. The chain only buys products if it can sell them 20 to 30 % cheaper than Aldi and Lidl. Moreover, manufacturers must deliver their products to the shops themselves and are only paid for what is sold. Unsold stock has to be picked up again. That results in empty shelves. There is no prospect of improvement, now that many suppliers want to avoid doing business with Russian companies.

No licence

The UK is not an isolated case: in Spain, too, the discounter is forced to retreat: all eight stores are to close, less than a year after the start. In France, Mere was about to open its first shop in Thionville, north of Metz, but the mayor is now putting a stop to that: he refuses to grant a permit. “We are mobilising to help Ukrainian refugees: it is therefore incoherent to have a Russian economic player with us at the same time”, he says.

In Belgium, Mere’s ambitions also seem to be tempered. Former director Jean-Claude De Gheest has in any case not been involved in the plans since September, he told newspaper Het Nieuwsblad on Thursday. “The store in Opwijk was installed, but there were no products.” Here, too, the retailer could not find suppliers willing to supply at rock-bottom prices. Moreover, with the war in Ukraine, it seems very unlikely that the arrival of a Russian discounter can count on much enthusiasm from consumers.

In Germany, Mere still has six stores: we have no news on those for the time being.