Nevena Kostic, Director of Retail SEE Group has joined Nemanja Savcic Director of NEPI Serbia, Tijana Vujovic, CEO of Confluence Property Management, and Djura Stanic, Managing Board Chairman of BlackOak Developments Serbia, to discuss the Retail Market in Serbia at the REBEC Real Estate Conference on the 23rd of June at Metropol Palace Hotel in Belgrade. The panel was led by Alexander Samonig, Managing Partner of Ecovis Confidas.
Since the last Rebec in June 2014, Retail SEE Group has published over 1.300 news articles about the retail market in the region and by reflecting on the main events, Nevena Kostic has pointed out top 5 current and future retail trends in Serbia:
1. Retail Parks
Although in the past year there has been a hype in the local media about large scale retail projects planned in Belgrade, the developments that have been realized in this period have been retail parks nationwide. We have celebrated in a years time the opening of three retail park developments across Serbia, starting with Vivo Park in Jagodina in September 2014 following with this years openings of Stop Shop retail park in Cacak by Immofinanz and Zemun Park in Belgrade by Mivne Group. Today we have seven retail parks in the country with the number to rapidly grow in the next five years if the developers active in the market realize their business plans. The top developers who have announced plans to expand their retail park portfolio to several locations across the country include Immofinanz, Aviv Arlon, Mitiska Reim in partnership with Poseidon Group, BIG CEE Serbia and local developer MPC. It is important to note that the developers are not focusing their attention only on larger cities such as Belgrade, Novi Sad and Nis, but are also buying locations in secondary smaller towns including Subotica, Zrenjenin and others.
Retail park developments are good alternatives to shopping centers due to lower cost of construction, management and rental levels. They can increase the supply of modern retail space across the country, which is a big local issue, while still being affordable to discount retailers that can cater to consumers within secondary cities or locations that have lower purchasing power.
2. Online Shopping Platforms
In the past year Retail SEE Group has published numerous articles on local and international retailers launching online shopping platforms across the whole region, including H&M and Ikea in Romania,
It is important to note that Agrokor, leading regional retail conglomerate from Croatia and owners of Konzum, Idea supermarkets as well as the majority share holders of Mercator, have announced in April 2015 that they have started on the development of their regional online shopping platform.
Although in Serbia there are a number of existing retailers with online shopping platforms and home delivery services we expect this trend to rapidly takeoff this year due to Paypal. According to the Ministry of Trade 1 million people have used Paypal in Serbia in 2014 and the number will increase since in April 2015 Paypal has announced they will enable local companies to use their services for their online transactions.
3. Green Building Certifications
In April 2015 Usce Shopping Center in Belgrade has become the first shopping Center in Serbia to be awarded a LEED EBOM certificate, a voluntary certification standard developed by the United States Green Building Council. With the assistance ofENERGO Group, Usce management has implemented necessary changes to their mall for sustainable development, increased efficiency in water consumption, energy efficiency and adequate use of resources. ENERGO team has during the same month gathered retail developers and retailers in Belgrade at Metropol Palace Hotel to present the benefits of obtaining the LEED certificate, which shows that the interest in green building is on the rise. We believe this will influence other existing retail schemes to make similar investments to become more energy efficient and will influence developers on how they construct their retail projects in the future.
4. Local Brands
The past year has seen an increased expansion of local retailers and domestic brands. Local retailers are strengthening their position in the local and regional market and are becoming good potential tenants for modern retail developments.
The largest domestic supermarket chain Univerexport has doubled its retail network in the past year bringing its store number to 124 units and announcing plans to continue to expand outside the Vojvodina region. In 2015 Univerexport has entered for the first time a retail park development, Zemun Park, and will consider other retail park projects based on the future success of their new store.
Gomex supermarket chain has also been aggressively expanding bringing its retail network to 120 stores and announcing to open an additional 25 stores by the end of 2015. Their main expansion point will be Belgrade where they plan to open 10 to 15 stores.
Lilly, the leading drogerie chain in Serbia has expanded to over 140 stores nationwide and strengthened its presence in Bulgaria in the past year by reaching over 40 stores.
Sport Vision, leading sports goods retailer, has expanded to over 150 stores in Serbia, Bulgaria, Macedonia, Albania, Bosnia and Herzegovina, Montenegro, Croatia and recently Romania, scanning Turkey and Greece as future expansion destinations.
This year has also marked the continued expansion of domestic brands internationally through franchising, with lingerie brand Extreme Intimo opening its first store in France and Luna Fashion opening its first store in Russia.
Manual Co, domestic leather goods retailer, is planning to expand its retail network by opening 5 new stores in Belgrade by the end of 2015 and launching a new handbag brand offered at high-street prices “Coffee with Milk” which they will introduce to the Serbian market in 2016 and expand internationally.
Other top local retailers that have been most active in expanding in the past year include fashion brands P…S…Fashion, Tiffany Production, Gigatron, Aksa, Dexy Co,Bomar and others.
5. Pop Up Stores
A western trend developed in the early 2000 during the recession as a way for retailers to increase sales, lower rental costs and risk. Pop up stores are “poping up” in the region, with Romanian electronics retailer Domo, announcing to open 100 pop up stores in Romania by the end of 2015, besides operating its 80 standalone units in the country. City Center one Split in Croatia introduced a Lush pop up store in December 2014 within their mall. Pop up stores would be excellent solutions for retailers in Serbia to test a high street or shopping center location with a short temporary lease. Pop up stores are also excellent marketing tools to create brand awareness as a sudden appearance of a store attracts attention and is known to influence impulse shopping due to its short term presence. Existing shopping centers in Serbia, such as Usce, are already using pop up stores to lease out space for seasonal events.
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