What further expenses can a discount retailer that operates withthe smallest costs on the market give up? Norbert Missbrandt, headof Plus network, says he has not touched the expansion budget orwages, but, on the contrary, boosted sums in 2009. Instead, heoperated cuts on the marketing and logistics segments.
Plus bought two plots of land in Bucharest right from investorsthis year and became a developer for 21 of the 23 expansionprojects finalised so far. "(...) This year, we bought four plotsof land in Bucharest, of which two from real estate developers, atprices 15-20% below the level at which they could be assessed in2008," says Missbrandt.
He plans to finalise the construction of stores on these plots in2010, a year when he says he will maintain the expansion pace. Thefour projects would drive the network to a total number of 9 storesin Bucharest, with plans for the following years includingexpansion to 30 stores here.
The real estate market slump brought a strategy change in the caseof Plus in the past year. Whereas until 2009 rented spaces and landacquisitions were equally taken into account for expansion, thisyear of the 23 new stores 21 are located on plots owned byPlus.
Expansion funds also needed to be boosted. "In 2009 we had to alsoresort to intra-group loans as we needed financing fast (...),"Missbrandt says. Plus will have 23 stores more than in 2008 byyearend, with expansion investments standing at 35m euros. By 2010,the company will thus operate 94 stores domestically.
"Discounters are gaining ground this year in retail, both owing toexpansion and the spaces they own. The closer you are to customers,the more you stand to gain (...)," Missbrandt says.
Last year, Pludi Market Romania, Plus operator, posted 277m-eurosales with 71 operational stores. The network is owned by Germany'sTengelmann group. Despite worsening market conditions in the pastthree or four months, Missbrandt says he is not consideringdramatic cost cutting steps.
