Three major supermarkets merged in Croatia

In Croatia, three major food retailers have united in an endeavour to slash prices and maintain a significant presence in national competition.

 

Slovenia’s Mercator, Croatian chain Plodine and Billa - together with the Austrian REWE Group - are merging to adopt a coordinated approach to food suppliers.

 

 Mercator’s senior executive Alan Krickovic clearly outlines the objectives of the initiatives, stating that “Our goal is to purchase products at reasonable prices and eventually offer lower prices for consumers, something very important amid ongoing inflationary pressures. The three firms will have an equal share in this newly formed commercial trio. As they stand individually, they jointly cover 20% of the Croatian market, with private company Konzum leading with 30%.

 

“Our suppliers will also benefit as they will be able to cut distribution costs and will have access to 20% of the market” said Djozi Heberling of Plodine.

 

Croatia’s central bank forecasts average annual inflation to be at around 6.5% this year, up from 2.9% in 2007. Year-on-year inflation was at 7.4% in August. Prime Minister Ivo Sanader urged retailers and suppliers earlier this year to reduce their profit margins to ease inflation.

 

Some of the retailers and suppliers launched a public campaign boasting price cuts, but consumer watchdogs said that the cuts were much more modest than previous hikes in prices.