Supermarkets in Albania: a relatively new business

TIRANA, Feb. 14 – The supermarket business, an icon for Albanians after the fall of communism, has still a lot of potential given the lack of such stores throughout the country, except Tirana and Durres. Because of the retail fragmentation, there are just a small number of halfway modern supermarkets available only in the country’s biggest cities. A supermarket to the ordinary post-communist Albanian represents the very longed for bounty of food. The traditional markets are still important. Set up in the bazaar-looking way they are still Albanian’s choice in the morning especially to get fresh fruits and vegetables. Things are changing slowly though. Now more and more Albanians prefer filling up their cars in large supermarkets. The event has become a tradition for some families who drive to the only mall called QTU (short for Trading Center Universe) and spend some quality family time wondering the stalls.
Domestic players are weak and there is small inward investment. There is a handful of very small supermarket chains, but not usually with more than four or five neighborhood store-sized outlets Nevertheless the fragmented retail market a decent choice of imported products and frozen food are available at some outlets, especially in Tirana.
Albaniaճ first and only superstore was opened in a shopping centre in Durres in spring 2005. The Euromax shop had a retail space of 4 000 m2, offering a choice of 14 000 products. It is difficult to identify the top 5 grocers in Albania. Euromax, Big Market and another domestic company called XHEA with four outlets averaging some 300 m2 are among them. The wholesale market is also very fragmented: many small wholesale companies which buy from larger wholesalers. This makes the food distribution chain inefficient. There currently is no alternative given the limited possibilities of the national infrastructure and poor economic development. Also, in Albania’s national industry is far from reaching EU standard, so a large proportion of high quality consumer goods are imported. Imported fast moving consumer goods are available in the food, drinks and body care categories.
Given the low degree of consolidation, competition laws do not play an important role in the national food retail market. Since 1999, consumer price inflation has been remarkably low, ranging from around 0 percent to 3 percent. Currently, the level is relatively constant at below 3 percent. Private consumption per capita in leading CEE economies is three or four times as high, and in most EU economies, consumers are more than 10 times as wealthy as those of Albania.
Future plans also belong to foreigners. The Italian operating company, Mane TCI, announced plans to set up a total of four such outlets by the end of 2006. The first supermarket of the European style is expected to be opened by Italian Conad Adriatico this summer. Italians will surely not be the only ones to exploit the young market. The Turkish Migros Turk announced a year ago that it was considering market entry, while Slovenian Mercator is planning to enter Albania without giving a specific time frame. One thing is certain. The consumer culture is quickly developing in the country and the demand for goods is stable. Fed by remittances Albanians do allocate a lot of margin to spending rather than saving.