What further expenses can a discount retailer that operates with the smallest costs on the market give up? Norbert Missbrandt, head of Plus network, says he has not touched the expansion budget or wages, but, on the contrary, boosted sums in 2009. Instead, he operated cuts on the marketing and logistics segments.
Plus bought two plots of land in Bucharest right from investors this year and became a developer for 21 of the 23 expansion projects finalised so far. "(...) This year, we bought four plots of land in Bucharest, of which two from real estate developers, at prices 15-20% below the level at which they could be assessed in 2008," says Missbrandt.
He plans to finalise the construction of stores on these plots in 2010, a year when he says he will maintain the expansion pace. The four projects would drive the network to a total number of 9 stores in Bucharest, with plans for the following years including expansion to 30 stores here.
The real estate market slump brought a strategy change in the case of Plus in the past year. Whereas until 2009 rented spaces and land acquisitions were equally taken into account for expansion, this year of the 23 new stores 21 are located on plots owned by Plus.
Expansion funds also needed to be boosted. "In 2009 we had to also resort to intra-group loans as we needed financing fast (...)," Missbrandt says. Plus will have 23 stores more than in 2008 by yearend, with expansion investments standing at 35m euros. By 2010, the company will thus operate 94 stores domestically.
"Discounters are gaining ground this year in retail, both owing to expansion and the spaces they own. The closer you are to customers, the more you stand to gain (...)," Missbrandt says.
Last year, Pludi Market Romania, Plus operator, posted 277m-euro sales with 71 operational stores. The network is owned by Germany's Tengelm
