Hungary’s cheapest shop has refused to explain why it has been closed for several days, citing “technical reasons” – an explanation that few people believe. Most suspiciously, all of the company’s European shops have reportedly shut, with “technical issues” cited in each case. Some commentators already believe the Budapest outlet will not be closed for merely a few days – which might be understandable in the event of a technical problem – but for much longer. Its staff have reportedly already been dismissed.
Hungary’s cheapest shop – with compromises
Until 1 August, Basket Plusz, the Mere group’s only Hungarian shop, regularly posted videos advertising a range of cheap products. The Russian-backed group’s Budapest outlet, located in the city’s 18th district, opened at the beginning of December last year, just in time for Christmas, and marketed itself as Hungary’s cheapest shop – a claim that, judging by customers’ experiences, appeared to be justified.
That came with serious compromises. The store relied on B- and C-tier brands, contracts that favoured suppliers – who were paid only for goods that had actually been sold – and a stark, warehouse-like appearance. The premises, crammed with pallets and resembling a Metro-style warehouse more than a conventional supermarket, offered a poor shopping experience but undoubtedly helped to keep prices down.
Some customers, however, complained that the products they bought were not as good as comparable items sold by other retailers.
Another explanation for the closures
The sole Hungarian outlet closed last week, citing technical problems. Its Facebook page has not been updated since, and reports suggest that the small number of employees working in the quasi-warehouse-style shop have already been sacked.
The technical explanation appears particularly suspicious when viewed alongside similar reports from Slovakia and the Czech Republic.
Világgazdaság reported that Mere’s Slovak shops – where the chain also arrived last December – as well as its Baltic and Czech outlets, had also ceased trading. Technical reasons were cited in those cases, too. The real explanation, however, may be the EU’s sanctions package adopted at the end of July, which placed Sergei Schneider, one of the owners of the group behind the Mere, Svetofor and MyPrice chains, on a sanctions list.
The Czech Republic even froze the family’s shares after the sanctions came into force. As a result, they cannot sell their holdings or receive dividends.
Is the group withdrawing or merely going dormant?
In Lithuania, the authorities are investigating whether the newly opened Ola shops are linked to the Russian group and whether they represent an attempt to evade sanctions. Previously, 30 shops closed in the country and 250 people were sacked.
According to Világgazdaság, the central question is whether the closures signal the group’s withdrawal from Central Europe or are merely temporary measures.
Hungarian customers have expressed their anger over the closure in Mere-related Facebook groups, while hoping that the shop will reopen soon. Although some accept that the closure may be the result of sanctions, many believe that neither the EU nor the government led by Péter Magyar should drive out what they regard as a promising initiative.
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Why was the owner of a food company sanctioned?
The sanctions against Sergei Schneider came into force on July 23 and include an asset freeze, a ban on financing and the suspension of the company’s operations.
The stated reason is that the Russian businessman’s corporate empire plays a significant role in sustaining Russia’s domestic economy and therefore contributes indirectly to Russia’s invasion of Ukraine.
Czech business paper explains how and why Tesco will withdraw from Hungary
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