Greek supermarket chain expands despite recession

Greece's second-largest supermarket chain AB Vassilopoulos (majority-owned by Belgium's Delhaize) plans to go ahead with its investment plans this year including the launch of 32 new stores in 2009-10 and refurbishment of existing stores and upgrades of their IT and the supply chain operations.

 

Food retailers around the world are taking a hit due to a consumption slowdown, but AB believes it is well-placed to weather the storm, thanks to its focus on generic products and lower operational costs.

 

The company plans to invest about 65 million euros mainly to refurbish existing stores, expand network and upgrade IT operations and improve their supply chain.

 

Greek supermarket sales have been taking a hit, with sales by volume dropping 4.9 percent in January, according to official statistics. However AB is weathering the crisis due to its lower operational costs compared to its domestic competitors, its wide variety of generic products and more efficient management of its inventories.

 

The chain, with a current network of 201 shops, aims to open 16 new stores annually in 2009 and 2010, focusing on northern Greece and Crete. There are no plan to expand abroad in the near future.

 

Last year, AB invested about 86 million euros and spent another 65 million to acquire peer Plus Hellas.

 

In 2008, AB, reported net profit of 32.7 million euros on sales of 1.34 billion euros.