The COVID-19 had a significant impact on all spheres of the Belarusian economy in 2020. Nevertheless, the outcomes of the pandemic had less impact on the grocery retail compared to other spheres as there were no severe restrictions imposed in the country.
The Belarusian retail market has shown high growth rates over the past few years. Further modern grocery retail penetration remains the main engine for market growth.
Despite modern grocery retail penetration increased to 52% in 2020, it still remains at a low level compared to other developing and developed countries. At the same time, it confirms the potential for the further development of modern retail format in the Belarusian market.
Eurotorg is the undisputed leader in the Belarus grocery retail market, with a market share of approximately 19% of the overall food retail market in 2020. In the modern format grocery retail market, the Company’s 2020 market share was approximately 35%, that is almost five times larger than the second player and higher than the combined market share of the next four competitors. Eurotorg has also built up an enormous gap by geographical coverage, covering approximately 180 localities without any modern retail competitors.
Eurotorg operates a multi-format chain: from convenience stores to supermarkets and hypermarkets under three banners: Euroopt, Hit! and Groshyk. The majority of stores are of convenience format under the Euroopt banner, the new Hit! discounter banner was launched in 2019, and the Groshyk banner – in 2020.
Since 2017, Eurotorg has been focusing on developing smaller formats which is currently the key format for the Company. As of the 31 March 2021, the number of urban and rural convenience-format stores amounted to 809, while their total share in selling space is 44%. Convenience stores accounted for 53% of total net retail sales in 1Q 2021.
The Company opens discounters: soft discounter Hit! and hard discounter Groshyk in highly competitive locations where there is insufficient customer coverage for standard Euroopt stores. The discounters' aggregate share of the selling space at the end of Q1 2021 was 19%, and the share in the net retail sales of grocery stores was 24%.
This diversified multi-format chain model enables the Group to meet the different consumption needs of its customers, from daily small purchases to large family shopping missions, and to penetrate every location in Belarus according to the size of the local population and potential customer base. The Group has a strong position across all formats and all types of localities in Belarus, with more sizeable gap vs the second player in smaller formats and cities.
The Company’s strategy, based on offering a focused assortment of fast-moving products at market-leading prices, delivers a value proposition that is well-tuned to the needs of Belarusian consumers. Eurotorg’s focus on enhanced customer value proposition enables to achieve an outstanding loyalty level (2.5 mn active loyalty cards in December 2019) and to become the store of choice for 43% of Belarusians, according to BCG.
The in-store shopping experience is enhanced by unmatched marketing campaigns, such as the long-running “Udacha v pridachu“ (Luck to boot) lottery draw with higher-value prizes and seasonable marketing campaigns. These campaigns complement Eurotorg’s product offering with emotional elements. Since the launch of “Udacha v pridachu”, over 2.5 mn unique customers (or more than 25% of the population of Belarus) have participated in the lottery draws.