Historically, Belarus hasn't been seen as a hotbed of retail innovation. Eurotorg, the country's largest private employer and owner of the Euroopt brand, is seeking to change all that.
On Friday, Eurotorg announced full-year sales that indicated the progress that the retailer has made in the past year, both in terms of growing its portfolio and embracing new formats.
Net sales were up 5.5% year on year, to BYN 3.57 billion (around €1.46 billion), with like-for-like sales up by 1.1%.
As of 31 December, the company operated 500 stores boasting some 278,500 square metres of space, with 47 new stores (7,800 square metres of space) being added to the portfolio during the year.
New Format
Last August, Eurotorg introduced a new 'discounter' format to Belarus, under the banner Brusnichka, the latest addition to a portfolio that includes E-mini and E+ convenience outlets, E++ supermarkets and E+++ and E++++ hypermarkets.
Eurotorg has long positioned itself as a limited-assortment discounter with benefits. Its Euroopt Prime store, in the upmarket Galleria Minsk shopping mall, features a range of fresh counters and food-to-go options, which are a step above what you might get in another LAD operator.
Brusnichka gives the brand a chance to develop a banner that is more focused on aggressive price positioning, "[characterised by] a limited range of high-turnover products in the low- and medium-price segments, a lack of price promotions, and strong price-leadership communication," the retailer said in a statement.
Interestingly, Brusnichka will be positioned as a neighbourhood operation, with Eurotorg converting some 125 E-mini and E+ convenience stores, as well as E++ supermarkets, to accommodate the new branding, while also opening 12 new-builds under the banner – discounts on your doorstep, in other words.
The banner appears to have made an instant impact. In the fourth quarter of the year, sales and traffic density at Brusnichka exceeded the company average by approximately 1.8 times and 2.2 times, respectively. The stores themselves saw net retail sales growth of 68.2% year on year in the period.
Acting Fast
It's the latest move by a retailer that has proven itself willing to embrace change in order to meet the needs of an evolving consumer dynamic.
Eurotorg's loyalty programme is based on a 'real-time reward' strategy, where shoppers can win anything from cars to luxury apartments. This has led to the share of purchases with loyalty cards to rise as high as 73.5%. In addition, a local campaign, Bonsticks, whereby shoppers can collect a host of colourful characters, is becoming something of a local phenomenon.
Last year, Eurotorg launched a campaign encouraging shoppers to buy more per visit (and, as a result, visit its stores less often). It was potentially a risky strategy, but it appears to have paid off for the brand: while like-for-like traffic went down by 7.5% in its stores, basket size rose by 9.3%.
In addition, Eurotorg has also looked to the future, developing an online grocery business, E-Dostavka, in a market where Internet penetration is still relatively low.
Launched in 2014, E-Dostavka took just two years to turn a profit, given the low threshold for free delivery – just BYN 25 (€10.20).
As Andrei Zubkou, Euroopt chief executive, told ESM last year, "The decision to set a much lower threshold for free delivery was a risk, but we can say with authority that it paid off."
The launch of Brusnichka further underlines why Eurotorg remains 'one to watch' in the nascent Eastern European grocery sector.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
