Bulgaria’s Top 50 Retailers in 2022: Inflation spurs turnovers

The bigger picture

For more than four-fifths of the top 50 retailers, sales growth exceeds the inflation rate. For some companies, growth is above 50% or even 70%, with LPP (known for its fashion trademark Reserved) standing out with a rise in revenue of 130%. However, there are companies whose growth is below the inflation rate, with some even reporting a loss.

The average profit growth of the top 50 retailers is 22%. Seven of them have booked lower profits compared to the previous year, three are at a loss, and one returned to profit after a year of loss. The trend is for retailers to invest in modernization, energy efficiency, and improving their services. The number of employees in the sector is increasing.

The top 3: Kaufland, Lidl, Billa

Different retailers have diverse strategies, including store renovations and attracting other traders around their facilities. Over time, major retailers establish themselves with a unique signature and identity.

The revenues of the market leader, Kaufland Bulgaria, exceeded 2 billion levs in the fast-moving consumer goods market, which NielsenIQ estimates at around 12 billion levs annually. The company's profit increased by 2% to nearly 121 million levs, the highest in the ranking. During theLast year, the chain opened two new stores in Sofia, but its staff decreased by 15 people. By the end of 2023, it is expected to open two more hypermarkets. The market leader is facing reduced, highly price-oriented, and at the same time demanding consumer demandattitude, explained Kaufland Bulgaria's CEO, Ivan Chernev.

Milena Dragiyska from Lidl Bulgaria notes that 2023 began with uncertainty about commodity prices and deliveries. People are leaning towards budget shopping while striving for quality and healthy food. After two consecutive years of revenue growth at Lidl Bulgaria by nearly 16%, sales surged by 27% in 2022 compared to 2021. Profit also increased, by 20% year-on-year. The company reports 11% growth in their customer base within existing stores, with 76% of their sales in 2022 attributed to Lidl's own brands.

Billa Bulgaria achieved a turnover of over 1 billion levs after 22 years in the country, with growth of 24% in 2022. They plan to invest 53 million levs in 2023, mainly in opening new stores and renovations.

Metro Cash & Carry Bulgaria also registered a turnover of over 1 billion levs in 2022, achieving growth of 19.7%. CBA supermarket chain saw growth of 13.4%, reaching over 170 million levs in turnover, and nearly doubling its profit, to 6.7 million levs. The chainCBA continues to expand its network and invest in optimizing relationships with its suppliers.

White goods and consumer electronics retailer Technopolis Bulgaria and DIY business Praktiker Retail also achieved a combined turnover of over 1 billion levs (each? - не, сумарно. Технополис има 850 хил., Практикер - 3.4 и става близо 1.2 млн. лв. ), with growth of over 25% compared to the previous year2021. Their owner, Videolux Holding, is developing retail parks under the Holiday Park brand around its stores.

The Holiday Park chain, which is a combination of Technopolis and Praktiker shops, started with the opening of a store in Pazardzhik and the first phase of the facility in Pernik. Other facilities are planned, including in Stara Zagora and Haskovo.

Good results for otherselsewhere

The revenue of Fantastico Group increased in 2022, but profit decreased. Nevertheless, tThe company has continued to invests in improving its stores, increasing salaries, and developing new projects such as a logistics base for chilled goods and a trade center in Blagoevgrad.

Furniture retailer JYSK achieved a 28.6% growth in revenue and increased its profits in 2022. The chain's plans include opening new stores, to reach a total of 75 in Bulgaria, as well as renovating existing ones.

The Maxima Bulgaria chain achieved 21% revenue growth and is investing in expanding its network of stores and logistic bases. The chain for black and white household appliances, Zora, registered a 16.4% growth in revenue and continues to develop its new logistics center in the Sofia - Bozhurishte Industrial Park.

Technomarket Bulgaria achieved a 13.8% revenue growth and an increase in profits. Ownership of the retailer of white goods and consumer electronics chain has been transferred to the company Market Investment," which is associated with MRF MP Delyan Peevski.

The best in clothing retail

It seems that the clothing retail chains in Bulgaria have successfully dealt with various challenges in 2022, with many of them reporting significant revenue growth. Here are some of the most outstanding achievements:

LPP (the company that owns the fashion brands Reserved, Cropp, House, Mohito, and Sinsay) achieved a whopping 130% growth in sales in Bulgaria, reaching revenues of nearly 166 million levs. The likely reason for this growth could be the massive opening of Sinsay brand stores in retail parks.

Clothing and home products retailer Pepco achieved a revenue growth of 65.6%, surpassing 200 million levs in sales and successfully continuing its expansion.

IX Bulgaria, known for its brand Zara, reported a growth of 48% with sales of over 100 million levs in 2022. Fashion brand LC Waikiki expanded sales by 27% to over 100 million levs. Another fashion giant, H&M, registered a growth of 29.7% in its sales in Bulgaria. In online commerce, eMAG achieved only a single-digit growth of 4% in 2022, which may be related to the post-pandemic shift of consumers away from online shopping. Hypermarket chain Janet achieved an impressive growth of 46.7%, exceeding 100 million levs in sales and recording significant profits. Lagardère Travel Retail achieved a revenue growth of 34.8% in its revenues.

The beauty and health stores of DM Bulgaria had a successful 2022, with a growth of 32.3% in revenues and a significant increase in profits. Its competitor Lilly Drogerie also achieved significant growth of 35.6%, reaching a turnover of 143.5 million levs.

Doverie Brico (known by its DIY brand Mr. Bricolage) reported a sales growth of 30.6% with its turnover reaching 150.7 million levs. Its profit tripled year-on-year, to 7.4 million levs. Factors for this success include a low base in 2021, inflation of around 15% for home and garden goods, as well as more activeincreased purchases of products for basic home repairs and maintenance.

Furniture

House Market Bulgaria, the franchisor of home furnishing retailer IKEA, achieved a sales growth of 15.4% in 2022 and is expected to open a new order center in Veliko Tarnovo. The change in distribution organization in 2021, with the supply of products from the logistics base in Romania, appears to have been successful. Additionally, the growth in online orders during the pandemic has influenced the distribution business, which is striving to provide better customer service through collaboration with additional logistics companies.

Baumax Bulgaria (HomeMax) and Avanti 777 both achieved growth, with of 17.8% and 11.75% respectively. Furniture retailer Aiko reported an impressive revenue growth of 25.8% in 2022, reaching revenues of 128 million levs. Its profitability rate is the third highest among large companies, at 14.6%. It has been following an expansion strategy and plans to open a new store in Plovdiv.

Although furniture retailer, Moemax (Moemax Furniture Chain) which is one-third of the size of three times smaller than Aiko, it achieved even greater growth of 36%, with profits more than doubling to 2.9 million levs. Aiko and Moemax share the same owners.

Sporting goods retailer Decathlon Bulgaria saw a revenue growth of 16.6%, reaching 123.6 million levs, with the company's profits increasing by 19%. These results may be linked to increased interest in sports goods during the pandemic and changing consumer preferences.

The French company is expanding its presence in Bulgaria, opening a new store in Sofia's Lyulin neighborhood.

All these sales growth figures show that the retail sector in Bulgaria was stable and successful in 2022, despite the challenges related to inflation and the economic environment. Investments, business model optimization, and product diversity emerge as factors that contributed to this growth.