German warehouse groups Kaufland and Lidl are expanding into Serbia, but market leader Delhaize has stated "not to be worried" by this move. The Belgians "still see room for growth", despite disappointing results.
German activity in Serbia
Last month, Serbian Minister of Trade Rasim Ljajic announced that Lidl would start building its first Serbian supermarkets in the second half of 2014. He also added that the supermarket chain announced it will be present in at least 15 different cities in June.
Lidl is not the only Serbian newcomer, as according to Lebensmittel Zeitung Kaufland is also interested in the Serbian market. Kaufland is, just like Lidl, controlled by the family Schwarz, making this look like a coordinated attack on Serbia.
Room for growth
Belgian Delhaize had purchased Delta Maxi for 932 million euro in 2011, when the chain was still the unrivalled market leader with a share of 22 %. The move has not been a success story however, as last year Delhaize had to devaluate Delta Maxi by 195 million euro, as the expected profit increase turned out to be lower than anticipated.
Nevertheless, Delhaize does not seem particularly worried with the appearance of the two German chains into the Serbian market: “Delhaize is currently the largest Serbian food distributor and the appearance of other parties show that it is an attractive market, but modern retail only accounts for 30 % which means there is still room for growth”, a spokesperson said.