Macedonian market leader Kam Market is extending its hard-discount store network into Bulgaria. The ‘Macedonian Aldi’ opened its first ten stores in the capital of Sofia within one week, as Bulgarian retail portal regal.bg reports. The new stores are sized from 200 to 350 sq m and offer 1,000 FMCG items – half of them from Bulgarian manufacturers. The retailer's strength is its more than 20 private label brands from its home country and almost all are represented in the assortment.
Kam Market has timed its step across the border well. After Penny’s market exit the only representative of the discount segment remaining in the country is Lidl, who operates only 20 of its more than 80 outlets in the capital Sofia. These stores, many of them falling into the category of elegant glass palaces – as Schwarz Group CEO Klaus Gehrig coined them – are located in main streets and prestigious neighbourhoods. Presumably not targeting the same consumer segment that Kam is covering.
Kam’s advantage not only lies in its no-frills hard-discount concept, but also in its store size. Kam outlets measure only one-third the size of a Lidl store, giving the opportunity for this proximity format to edge closer to its customers while saving on leasing expenses.
The smaller sales areas, however, do not necessarily mean that the ‘Macedonian Aldi’ makes compromises when it comes to its sales concept. The trademark fruit & vegetable section and the in-store bake-off station both function in a similar fashion to those in its long-standing Macedonian markets.
Considering the economic potential of Sofia’s 1.2 million inhabitants and also that all other grocery players operate significantly larger sales areas than Kam, we consider the move an excellent opportunity for the Macedonian market leader to establish roots in Bulgaria and gain a solid foothold among existing retailers.