In a time when the Hungarian food industry is hit by the extreme high 27 per cent VAT (however there are a few exceptions in basic food products from milk and bakery) plus the so called “Health tax” or as many call it “Chips tax” hitting many product categories with sugar or salt or caffeine and further on the rising commodity costs because of bad weather it is not easy to remain optimistic.

On the producers side meat and milk industries are said to be in the worst position and while some meat producers with long tradition are already bankrupt many others – or even all – are in a very challenging situation making significant losses in 2012. Other categories find themselves in a bit better position however the overall situation of the Hungarian food industry is bad.

On the retail scene the most significant change is the exit of Delhaize Group from the Hungarian market. The new owners of its wide spread network and diversified store portfolio are as followings: Auchan took over 7 Cora hypermarkets and converted them to Auchan’s, raising the number of its Hungarian store network to 19. Dominique Ducoux, CEO of Auchan Hungary told Progresszív in September 1+1 equals 3 referring to the transaction and to the fact that the Cora network did add a lot of value to the existing Auchan network.

In fact, Auchan did reach the effective size with the 7 new hypermarkets in the Hungarian market. And it has to hurry as Tesco is finishing 2012 with a network of over 200 stores and with the focus – new openings – on smaller shop formats like small hypermarkets in small towns and downtown Tesco Express stores.

Besides Cora hypermarkets Delhaize Group had Match supermarkets and Profi discounts in Hungary. After long lasting negotiations Coop and CBA finally took over the majority of these stores (rest will be closed): 62 were bought by Coop – these are the stores outside Budapest – while CBA bought 48 located in the capital and its surroundings. Meanwhile CBA lost some of its bigger members and a significant part of its turnover. It means that in 2013 Coop will overtake CBA and will be the second biggest retailer in Hungary behind Tesco.

Despite of the above mentioned acquisitions the real winners of the year 2012 in Hungary are discounters, above all Lidl gaining many new customers. It has the effective number of stores however it could not open as many stores this year as it wanted to because of the new regulation by the state prohibiting almost all new openings in the country. Aldi tries to follow Lidl but is very much behind and has the first Budapest downtown stores too. Penny Market is the third discounter with much less new openings but still an important player.

Spar is led from 2012 by a new Austrian manager who has to make the Hungarian network more profitable. Besides the Spar, Interspar and City Spar network he started to build a franchise network too and is heavily promoting the advantages of joining this network. It does have a growth potential however so far only one independent shop owner joined with two stores.

Metro is trying to find its place and role in the Hungarian market where its core partners, the independent shopkeepers are loosing market share.

The drug store market is dominated by dm with far the biggest network however Rossmann is trying to keep the speed and invested a lot to modernize its stores and its offer too.

PROGRESSIVE Hungary