Ukraine multi-format retailer Fozzy Group has revealed plans to focus its expansion on its discounting supermarket banner ‘Thrash’. Business portal delo.ua quotes Mikhail Pritula, the banner’s Commercial Director, who has stated that Fozzy aims to add ten more stores by spring 2018 and will continue this pace of expansion throughout the rest of next year.
According to Pritula, like-for-like customer footfall at Thrash stores has increased by more than 10%, while revenue has risen by more than a third over the corresponding period. The Thrash supermarket chain was launched in October 2016 with the conversion of thirty of Fozzy’s existing Silpo stores.
Following a year of testing, Fozzy has decided on a new commercial direction for its multi-format operations and will now accelerate store openings ahead of the competition. Plans to open more than 40 Thrash stores next year with an updated sales concept – and in new premises – indicate that Fozzy has given the green light to its newly-founded economy banner. This decision comes at a time when all domestic supermarket operators are struggling with decreasing purchasing power and the relentless expansion of evolving ATB discount-minimarkets.
Velika Kishenya (Retail Group), Furshet, Billa and Fozzy’s Silpo are all feeling the pinch as the decreasing share of wallet strains retailers’ results. With Billa focussing back on Kiev after selling its business in the regions and Furshet only now emerging from financial entanglements, Fozzy’s only credible competitor in the discounting supermarket segment is Velmart, Retail Group’s chain of rebranded Velika Kishenya outlets.
Although converted Velmarts are showing similar results as Thrash, the planned store opening pace will be not more than half a dozen stores a year. This is mainly owing to the fact that Retail Group plays in a different league than Fozzy. According to LZ Retailytics data, Fozzy will reach almost 540 food stores at the end of 2017, while Retail Group will barely reach 70 units.