The beginning of the last year was very promising for the FMCG trading sector in Bulgaria. All parties were eagerly expecting the merger of Carrefour and Piccadilly (local retailer), an act that supposedly would facilitate the future chain in the process of gaining leading position in the market.

Nevertheless after nine months of travails and vain hopes, at the end of July, it became clear that the merger is not going to happen. In a letter to the media KMB Bulgaria – a member of Marinopolus Group – the main franchiser of Carrefour in Bulgaria announced that the group will continue to manage the network in autonomy.

Piccadilly opened its 53^rd shop in the country in March 2015, showing a 2,2% growth in sales and increase of the number of clients with 6% in comparison to 2013. And although the situation looked like as the trader is going to cope with the crisis, the end of September came by bringing the news that the chain is going to close 16 shops in Sofia and will reduce the number of shops in other big cities in Bulgaria such as Varna, Veliko Tarnovo and Bourgas. After these changes the number of operating shops shifted from 53 to only 20. The weak financial results were pointed out as the main reasons for the reduction and the closing of the shops was presented as a necessary step for the recovery of the company. Huge debts were run up towards the suppliers, which are not paid until the present moment. The natural response of the latter was cease in the product delivery for the two chains, which led to the emptying of the shop shelves.

Despite all the assurances that regardless the situation the retailers are going to continue with the development of their trading networks and the focus of the business will fall on satisfying the needs of the clients, the promises were not kept. The debts of Carrefour in May, 2015 were assessed on 20m leva. Piccadilly managed to partially liquidate its debts, but in the beginning of 2016 the media published information that the trademarks of the retailer are in sale by a bailiff.

The beginning of September 2015 coincided with the withdrawal of another international retailer from the Bulgarian market. The discount chain PENNY – part of  the REWE GROUP left Bulgaria and closed 49 shops. Part of them joined the network of BILLA – the other brand of the Austrian company that is present in Bulgaria, but the faith of the other shops is still further to be decided.

Despite the fact that in the beginning of the year there were some rumors that the BILLA supermarkets will be for sale, in September the retailer announced its plans to open its 150^th shop in the coming three years. The company pointed out that since its first move to the Bulgarian market in the year of 2000 it has already invested 500m leva and is planning to make further investments for another 200m leva in the near future. At present BILLA operates 98 shops in Bulgaria.   

All the aforementioned has created favorable conditions for the competitors and especially for Schwarz Group represented in Bulgaria by its two main brands – Kaufland and Lidl. From the very beginning of the year the two brands were rated at the first and second place from the Top 3 retail chains and had demonstrated that they are not planning to step back from these positions.

Lidl reported 60% growth in number of clients and 12 % increase of the number of its loyal clients. Since 2010 – the year at which the retailer became a figure in the Bulgarian market the discuounter has opened 78 shops and has invested 728m leva in land, building and equipment.

On the other hand Kaufland, which is going to celebrate its 10^th year at the Bulgarian market in 2016 continue to be on the leading position as a market leader. The net turnover of the retailer for the previous year amounts to 1,300b leva excluding VAT. Kaufland has 55 operating hypermarkets and is going to open the 56^th very soon.

One of the leading positions in the top retailers at the Bulgarian market chart is taken by a local player – Fantastico, which despite being situated only in Sofia, invested in the modernization of several of its shops and opened its 38^th shop at the end of 2015. The retailer also opened its first online supermarket – a subject of great interest, in cooperation with another Bulgarian entrepreneur. 35 orders are being processed each day and the number is growing with a constant rate.

Despite the last year was difficult both for the suppliers and the retailers there are no expectations for improvement of the conditions in the near future. The fragmented market, the low purchasing power and increase of the age of the shoppers line out the numerous challenges for each player on the market. Soon we will see who is going to survive and who will fall out of the game.