Ambitious plans: Russian discount chain determined to beat Aldi, Lidl in Hungary

According to telex.hu, the success story of the Russian Mere began in Siberia, with aspirations not only to conquer Hungary but also Europe. Previously, they expanded into Romania and Great Britain. However, their ambitious plans were temporarily halted by the Russian invasion of Ukraine. Nonetheless, it appears they’ve only paused temporarily. According to a leaked letter, they aspire to start operations in Hungary, a matter we have detailed in THIS article.

Telex reported that the Mere network is owned by Torgservis, with its first store established in 2009 in Krasnoyarsk, known for its WWI POW camp, where Hungarian soldiers were held captive. The company is under the ownership of brothers Sergei and Andrei Schneider, descendants of a German lineage. They don’t give interviews, instead silently constructing their supermarket empire.

Russian discount chain vows to be very affordable

The Russian discount chain, known as ‘Svetofor’ in Russia, boasts approximately 3,000 stores, mainly situated in small Siberian towns. Moreover, they have outlets in Kazakhstan, Belarus and China. Additionally, they’ve entered markets in Lithuania, Romania, Germany, Spain, Belgium and Britain. In Russia, their 2023 revenue totalled EUR 2 billion.

Their market strategy is straightforward: pledging prices 20-30% lower than competitors such as Aldi and Lidl. But how?

According to the manager of their Spanish subsidiary, they refrain from expenditures that would inflate costs. Consequently, there is minimal decoration or shelving, adopting a ‘Spartan’ approach. Furthermore, the absence of a warehouse means suppliers unload products directly into the shops. Naturally, employee numbers are kept to a minimum.

Consequently, Mere stores resemble warehouses rather than contemporary Western outlets. HERE are some additional photos.

Mere (or Svetofor in Russia) is very popular in the poorer regions. When they opened their first shop in Leipzig in 2019, the crowd was massive, and some people didn’t even have the chance to enter. Since customers emptied the local store, they had to close for days to restock their nonexistent shelves. A customer remarked that Mere is akin to Aldi in its early days.

Mere shifts its focus to Eastern Europe

In 2021, they aimed to expand into Western Europe, yet encountered obstacles; the Russian invasion of Ukraine thwarted their plans. In Great Britain, they established only one store in Preston, Lancashire, before withdrawing post-Putin’s attack. The conflict compelled Mere to exit Western Europe. Subsequently, following the war’s outbreak, they opened only two stores in Belgium, operating under the name My Price.

Expansion encountered difficulties for other reasons as well. Suppliers were displeased with unloading products in stores and receiving payment only upon sale, along with the obligation to retrieve unsold items.

In 2023, they announced they would like to focus on Eastern Europe. They opened stores in the Baltic states, Poland and Romania, so it makes sense to come to Hungary. They plan to open 200 shops and reach EUR 700 million in traffic. First, they want to make their stand in Budapest and the suburbs.

In 2023, they announced their intention to focus on Eastern Europe, opening stores in the Baltic states, Poland and Romania, rendering their arrival in Hungary expected. They aim to establish 200 outlets and achieve EUR 700 million in revenue. Initially, they seek to establish a foothold in Budapest and its environs.

In Hungary, nine food supermarket chains already exist, with industry players frequently asserting market saturation. Mere would become the 10th competitor.

However, the question arises: how does Mere’s market conquest align with the Hungarian government’s objective to safeguard the Hungarian food retail market for domestic companies?

Read also:

• Mfor: Orbán cabinet will squeeze foreign supermarket chains, Spar remains a target – Read more HERE
• Expert: Quality of food in Hungarian shops often worse than in Western Europe – Details in THIS article

Featured image: Russian discount store Mere in Serbia, depositphotos.com