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Interested in acquiring Norfa
On Monday it was announced that German low-priced retail chain Aldi will arrive in Lithuania, which plans to open at least 15 stores in the country per year. This was announced by the portal vz.lt, based on sources.
According to them, unlike its competitor Lidl, Aldi planned a rapid and aggressive development in Lithuania. A source noted that any information related to the plans of the retail chain in Lithuania is completely confidential. According to sources, Aldi may enter Lithuania independently or to acquire an existing commercial market player.
Aldi was interested in the possibility of acquiring one of the country’s largest retail chains, Norfa, but the talks did not end with negotiations, says Dainius Dundulis, owner of the Norfa group of companies. “We have contacted for sure, but we have not received such a specific offer. To be honest, now I really don’t remember if it was before or after the New Year, but recently,” D. Dundulis told BNS.
According to D. Dundulis, Aldi would become a serious competitor in the Lithuanian retail market. “I can safely say that he (Aldi – BNS) is a serious competitor for all outlets operating in Lithuania, and especially for large retail chains,” D. Dundulis told BNS.
The most difficult situation awaits the market leaders
“In my opinion, although there is a lot of competition between the retail chains in Lithuania, the arrival of a new brand will definitely increase it even more. Consequently, an intensified price war can be expected.
A new player entering the market will try to attract buyers from competing networks at lower prices for some time. But in the long run, I would not dare to say that the arrival of this network will statistically reduce prices, “said the news portal. lrytas.lt predicts SME finance economist Alexander Izgordin.
According to him, it is not worth waiting for a drop in prices due to global phenomena: rising prices for oil and other raw materials, rising wages in Lithuania.
“In the second half of this year, the world and European economies will enter a recovery phase from the coronavirus, which can affect the prices of raw materials and food. As a result, the prices of some products may go up. “
The economist Nerijus Mačiulis called on the social network Facebook to think about the relationship between price and quality in low-cost networks.
“It seems to me that we forget, or haven’t had time to find out yet, that we get what we pay for.
If I don’t want to pay more than a euro for what I eat, the modern economy will offer me a product, but there will be many corners in the process: instead of grains, that chicken will eat pills, it will live in the same cage with seven other animals, and workers there will not get a decent salary, maybe someone will even try not to pay taxes, etc. – wrote N. Mačiulis.
It also has the support of A. Izgordin. “Let’s not forget that consumers go to stores not only for the price, but also for the brand or the quality of the service. The purchasing power of the Lithuanian population is gradually increasing, with deposits amounting to almost a record 18 billion. Therefore, the aspect of low prices is no longer as relevant as ten years ago ”, emphasizes the economist.
Experts agree that the new network would attract a lot of interest due to the famous brand and its position in the market.
“The network reaches the market segment that is relevant to each of us. We visit grocery stores several times a week, so it will inevitably affect each customer’s shopping cart, ”says A. Izgordin.
According to economist Marius Dubnikov, the most difficult situation will await the market leaders. “The future player in the market has very solid financial resources and many years of work experience, so leaders who want not to lose customers will have to sweat,” he warns.
Smaller networks will need to invest more in visibility, marketing, and customer acquisition strategies. “Increased competition means that everyone will have to look for niches where they are strong,” says Izgordin.
Still, older people are not in danger of falling out of the market. “Prisma withdrew from the market, but its strategy was not as aggressive as the low-priced band-aids. I highly doubt that the opening of 15 stores would eliminate any participant from the market, ”says M. Dubnikov.
