Kaufland to invest about EUR 120-130 M this year in Romania

Kaufland intends to invest EUR 300 M in stores it wants to open in the next four years, rising the total number of outlets in the network to 50, Kaufland Romania General Manager Gunter Grich, stated in an interview for Nine O’Clock. Kaufland is the first retailer with investment plans in small and medium size towns, expecting to open a store in Piatra Neamt.

‘How much have you invested in the Romanian retail market since the company came to Romania, in 2005?’

Our investment in the Romanian market to present amounts to EUR 250 M. Kaufland is present in Romania with 17 stores and a central warehouse in Ploiesti. We will open our 18th store in Piatra Neamt, at the end of the month. In 2006 we opened 14 units in Alba Iulia, Timisoara, Baia Mare, Targu Mures, Galati, Cluj Napoca, Hunedoara, Satu Mare, Suceava, Targoviste, Bistrita, Pitesti and Bucharest, in the value of nearly EUR 140 M. We expanded our chain of stores and consolidated the position on the market of the Kaufland concept, something that has been proved by the millions of customers we have had.

‘The retailers that have entered the Romanian market over the last years have announced ambitious expansion plans for this year, keeping the growing trend from 2006. What are the plans of Kaufland in 2007?’

Kaufland will invest about EUR 120-130 M in Romania this year, to open another 16 hypermarkets, in order to achieve a total number of 33 locations. The investment per hypermarket is from EUR 5 to 10 M.

‘What are Kaufland’s strengths in withstanding competition on the retail market?

Kaufland has introduced a new concept to the Romanian market: ‘Closeness to the customer’, that we believe to be our number one competitive advantage. The customer is the main factor that we consider in all the operations of our company. In everything that we do we try to be closer to our customers, to satisfy the customer by bringing them value for money. A novelty of the Kaufland concept are the guarantees that we offer to the customers: the lowest price guarantee, the guarantee of the short waiting times at the cashier’s desk, the guarantee of freshness of the goods we sell, the guarantee of returning and exchanging the goods. All this decisively contributes to our success in Romania. Thanks to customs duties’ having been abrogated at the beginning of the year we cut prices by a few hundreds per cent for both food and non-food products. The reductions go as far as by 55 per cent.

‘Do you think it is a plus that the Kaufland hyper market was the first retailer to announce concrete plans in the small and medium towns that have been avoided so far because of their lower purchase power?’

All major retailers have so far preferred the large cities because eof the urban agglomeration and high purchase power they offered. We nevertheless believe that small and medium towns, while having a lower purchase power, offer a good potential mainly because they have not benefited so far from this kind of organised form of shopping, at western standards. That is why we decided to include such towns in our expansion plans.

‘What is the development strategy pursued by Kaufland on a medium and long term in Romania?’

Kaufland’s medium –term plans include an investment of UR 300 M in opening new hyper-markets, in order to have 50 units in total in the next four years. The company has applied for loans of EUR 100 M with the European Bank for Reconstruction and Development (EBRD).

Nine O'Clock