This March, Delyan Peevski made the headlines with the idea of pouring public money into state-run stores for cheap food, located in post offices. Three months later, 10 million levs have already been allocated to the state budget for the operation, and the requirement for the stores to be inside post offices has been dropped. Meanwhile, the Ministry of Agriculture and Food (MAF) is close to registering a state-owned company called "Store for the People". Without any tender or competition, the ministry has chosen a private partner - the COOP chain, owned by the Central Cooperative Union (CCU).
There is still no clarity about the number of locations, the required funding, how suppliers will be selected, rental terms for the premises, or the commission of the private retailer. There is even less evidence that the proposed 10% mark-up cap will be sufficient to cover the company's operating costs. But for Peevski's MRF party and the ruling coalition, taxpayer money can be spent on populist ventures with no proven effectiveness.
The store project is taking shape
Peevski proposed opening grocery stores in branches of Bulgarian Posts as a way to fight speculation and high prices. By May, the post offices had apparently been sidelined. During a meeting of the parliamentary agriculture committee, Minister of Agriculture and Food Georgi Tahov announced that the chain of state-run stores would be located in the retail outlets of the Central Cooperative Union (CCU). He added that the ministry had held meetings and discussions on the topic and had drafted documents for establishing the state-owned company.
From Tahov's official statements and written responses to Capital, it becomes clear that the state company will be called "Store for the People." This will also be the name used on the storefronts and as the brand on the products. The founding documents, including the company's articles of association, are currently being finalized and require approval by the Council of Ministers. Moreover, the Ministry of Agriculture is preparing a list of goods that will be sold in "Store for the People".
"The idea behind these stores is not to compete with existing retail chains, but to meet the food supply needs of people who either have no access to store chains or lack the necessary means," the Agriculture Ministry said in an official statement to Capital.
In addition, CCU was chosen as a partner because of its retail network in small towns and villages. The goal is to provide socially oriented trade that's accessible both in larger cities and in remote rural or mountain areas.
According to Vanya Boyuklieva, Deputy Chair of the CCU, the group joined the talks because it has many years of experience in food retail, especially in small and remote places. It also has stores across the country and runs social projects like delivering essential goods via mobile shops.
The ministry further stated: "The relationship between the state-owned company and CCU will be governed by a written framework agreement, the terms of which have already been defined. The agreement will be signed immediately after the new company is registered in the Commercial Register."
The terms and rental pricing arrangements between the state-owned company, the respective retailer, and CCU will be set out in a supplementary agreement to the framework contract. The price will depend on the space used, with two options under consideration: "using a dedicated stand or the entire retail area," according to the ministry's response to Capital.
Pilot store to open in Plovdiv
The pilot project of "Store for the People" will launch in Plovdiv, with the number of stores to be determined by the state-owned company. It remains obscure why the initiative is starting in a major city and in a store located in the central area.
"The retail network of the CCU includes around 1,500 commercial outlets, but since the resources of the state-owned company are limited, this will determine the gradual establishment and expansion of operations," the Ministry of Agriculture further declared.
Sales Organization
Two options are being considered: leasing an entire CCU outlet by "Store for the People" and/or renting individual stands. "Both approaches are possible and will be selected depending on the specifics of the location, the settlement, and the region. At this stage, it is more logical to begin with dedicated stands or to sell the goods branded with the project's logo alongside other items from the same product group. The choice of individual locations and the model under which they will participate in the partnership project will be made jointly by the CCU and the cooperative organization managing the outlet, in coordination with the company 'Store for the People', of course," Boyuklieva explained.
The products offered by "Store for the People" EAD will be branded with the project logo as well as the CCU brand. They will be placed on separate stands and will carry barcodes distinct from other items.
The plan is to invite local suppliers of fruits, vegetables, dairy, and other products from the regions where the stores are located, while for staple goods, all interested suppliers will be eligible. Yet here too, the selection mechanism appears entirely unclear.
Despite some differences of opinion, most experts remain deeply skeptical. Concerns range from poor logistics and uncompetitive pricing to limited product variety, and potential conflicts with EU competition rules. As several commentators noted, the idea may sound appealing in theory, but without a solid, market-based business plan, it risks becoming just another costly experiment.
This March, Delyan Peevski made the headlines with the idea of pouring public money into state-run stores for cheap food, located in post offices. Three months later, 10 million levs have already been allocated to the state budget for the operation, and the requirement for the stores to be inside post offices has been dropped. Meanwhile, the Ministry of Agriculture and Food (MAF) is close to registering a state-owned company called "Store for the People". Without any tender or competition, the ministry has chosen a private partner - the COOP chain, owned by the Central Cooperative Union (CCU).
There is still no clarity about the number of locations, the required funding, how suppliers will be selected, rental terms for the premises, or the commission of the private retailer. There is even less evidence that the proposed 10% mark-up cap will be sufficient to cover the company's operating costs. But for Peevski's MRF party and the ruling coalition, taxpayer money can be spent on populist ventures with no proven effectiveness.
