Leclerc strengthens position in CEE
European presence and take advantage of the demand for cheap
private label brands.
The retailer said it aims to open two to three stores in Poland every year for the next ten years, investing €20.5million (PLN80m) each year. The retailer has already invested €436m in the country.
Analysts predict that although the expansion may take slightly longer than stated, Lerclerc's strong price conscious image will help them expand further into the lower income market of Poland.
The retailer plans to open supermarkets in small towns using its 2000 square feet format. This store size suits the Polish market where the vast majority of the population is spread out in rural towns.
Boris Planer, CEE analyst at Planet Retail told FoodandDrinkEurope.com: "Poland has a low population density, with only four per cent of the population living in the capital city. Small towns are a big opportunity."
He explained that tens of thousands of unexploited small towns are crying out for cheap modernized food retailers.
What next for Leclerc? - Despite the limited growth potentials in Slovenia, due to the small two million population and local retailer Marcator having a massive 48 per cent market share, Leclerc announced plans this week to open a second store there in Marebor, in 2007.
Isabele Caville, French analyst at Planet Retail said: "There was quite a long gap between opening the first sore in 2000, but I can't see Leclerc expanding beyond this."
Slovenia will remain a lucrative market for the French company with a very strong economy and the highest income of the former communist countries, she added.
Caville predicts the retailer will not try to enter any new markets in the near future following its failed attempt to enter Croatia's saturated market in 2003.
Instead, she predicts, it will continue to focus on its core French market where it is now successfully introducing private labels and looking to diversify into other markets.