Russians entering the Swedish Grocery Market

The last time we observed the Swedish Grocery Market changed dramatically, was when Netto left Sweden and sold their stores to COOP during the year 2019. But the Swedish Grocery Market is being changed and challenged now again as new players are coming to the Market. One of them is the well-known American retail company Costco. Another player coming to Swedish Grocery Market is a Russian supermarket chain called Mere. CBRE’s Dzmitry Fando, Sr Research Analyst tells you more.

So, who is Mere?

Mere is a hard discounter and is more known to me as “Svetofor” and “Torgservis”. Svetofor is a supermarket chain with its roots in the Siberian city Krasnoyarsk. Svetofor and Mere are founded and owned by the Russian Family; Schneider, and part of the company Torgservis. Svetofor opened its first store in Krasnoyarsk in 2009 and since then has become one of the leading Russian Grocery Markets with 1,700 stores across Russia. In 2017 Svetofor began its international expansion with its first stores in the Republic of Belarus, followed by stores opening in Lithuania, Poland, Germany, Serbia, United Kingdom, and more. Stores in the EU and UK were opened under the brand name Mere.

Opening in Sweden

The date of opening in Sweden is unknown. We do know that Mere is actively searching for personnel for their Business in Sweden both via Arbetsförmedlingen and via Russian-speaking social media groups on Facebook and Linkedin.

What is the typical Mere store?

When I for the first time visited Svetofor supermarket in Belarus, during the summer of 2019, my first impression was that it was a warehouse. Only the area, price shields, and customers would tell me that it was a supermarket. A typical Svetofor or Mere supermarket usually has an area of up to 1,500 square meters. Such stores are normally located in the outskirts of the city, quite often in the industrial area (like the first Svetofor supermarket in Krasnoyarsk).

Already multiple stores across Europe

In Germany and UK Mere is already called the “Russian Lidl” or the “Russian Aldi”. Both Lidl and Aldi expressed no concerns over Mere joining the discounter supermarket battle in Europe. But it is very hard to believe that Lidl and Aldi are not worried about Mere’s expansion. Svetofor and Mere combined own around 3,200 stores across Europe today. Approximately 2,500 of them are Svetofor stores in Russia, Belarus, and Central Asia. Mere stores are located in Ukraine, Poland, Lithuania, Latvia, Romania, Germany, Serbia, Spain, Italy, United Kingdom, and Bulgaria. Austria is to get their first Mere supermarket very soon. Torgservis had around 500 store openings during 2019 alone. By 2020 Torgservis was the fastest-growing Grocery Chain in Europe showing revenue growth of 39%. Mere aims to beat both Lidl and Aldi by offering prices 30% cheaper than them.

Summary

In the short run, when Mere enters the grocery market in Sweden, with prices 10-30% lower than Lidl's, it is possible that the growth slows down of the current grocery market challengers such as Willys and Lidl. That will in the long run make it possible for Mere might to gain market shares.

In one of our next articles, we will look at other challengers of the Swedish grocery market. Stay tuned.

Please contact Dzmitry or his Research colleagues in the Nordics:

Denmark Dragana Marina

Finland - Jussi Niemestö

Norway Einar Melberg

Sweden – Amanda Welander and Dzmitry Fando

Dzmitry Fando

Dzmitry Fando

Dzmitry Fando is Senior Research Analyst, based in Sweden. Dzmitry has extensive experience in research, in the real estate industry. He has also worked with strategic business analysis and business development.
Mobile phone: +46 (0)76 899 3252

dzmitry.fando@cbre.com

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