Supermarkets have become an integral part of modern life in big cities. The first retail chains appeared in Ukraine ten years ago. The first supermarket of now famous store chain was opened in Pechersk, and people started to digest the new form of trade, study variety of choice of domestic and imported production.

Soon it became obvious that supermarkets had better choice and lower prices, comparing to food markets. Not only large chains, but also local entrepreneurs started opening 'single' supermarkets with random names in regional and district centers, offering lower prices than traditional food stores.
Approximately at the same time, the first chains of cash&carry, enormous self-service store-depots, appeared in Ukraine as well. Back then, big supermarkets did not even have video surveillance, let alone merchandisers.

As of today Ukrainian market offers several famous domestic ("Velyka Kyshenia", ATB, "Silpo", 'Fora", "Karavan") and foreign chains ("Auchan", Metro Cash&Carry). Some earlier popular chains ("Ok", "Smak") have left the market. The market is extremely competitive, and every chain tries not only to attract, but also to keep customers. For this, they use every possible means, including low prices, variety of choice and various promoting actions.

What stores can offer

In 2012, all main chains continued working on the so-called house brands. Such production is cheaper for consumers, as it is ordered by the supermarket itself and at special prices. Such production includes milk, pastry, housewares and even perfumes. Though the house brands sector has been developing for years in Ukraine, not every retail chain can afford house brands products, director general of "Auchan Ukraine" Gerard Gallet told ForUm. In Europe, for example, the share of house brands in supermarkets makes about 50%.

As for various promoting actions, experts note that reduced purchasing capacity of Ukrainians during 2011-2012 forced retail chains to invent more promoting actions and bonuses, for example discounts for cookery at off-peak hours (late evening, early morning) or reduced prices for not fresh pastry, a promoting action "buy two - receive the third for free", various sets like two chocolate bars plus a can of coffee, a bottle of beer plus a glass.

Moreover, many supermarkets try to supplement propositions with "exit bonuses" - tea or coffee shops, jewelry stores, draught beer shops, located near principal doors, but outside the main trade zone. Somewhere in that zone, there are also ATM and Cash-in ATM for various payments. 

In turn, shopping malls, which all have large food supermarkets, can afford a number of small shops and boutiques, as well as one or two cafes. Director of the research center RetailStudio Mykhailo Hryshchenko adds that if "Karavan" is designed as diversified shopping mall, "Auchan", for example, is a retail food hypermarket with strong "framework" in the form of non-food shops-tenants, including jewelry stores and dry-cleaners.

Specialists pay special attention to the development of the sector of semi-products and ready dishes. According to Gallet, "many people do not have time for cooking, thus they buy semi-products in convenient boxes to spend less time in the kitchen, but more time with relatives and friends. Light breakfasts or instant dishes are very popular now. Already cooked and dressed dishes are one of the "hot" trends nowadays. In the majority of leading retail chains, Ukrainians can find salads, pre-packed dishes, fish, cheese, ready sources, etc.

Following the offers and promoting actions Ukrainians now choose food supermarkets as the place of regular shopping. According to Gfk Ukraine company, in 2012 80% of city residents preferred to do shopping in food supermarkets, and only less than 15% traditionally went to market squares.

New Year boom

The important role of retail chains becomes especially evident during holidays, when people go shopping night and day, and supermarket workers do not have time to refill the shelves with popular goods.  Thus, in December for example, the sales of food supermarkets make 20% of the total annual turnover. For winter holidays, supermarkets do not even invent any promotion actions - their prime task is to replenish the stock in time and avoid long lines at cashier desks. However, another matter is that in the period of such active shopping supermarkets try to sell stale or expired goods.
According to the data of Research&Branding Group, 70% of adult population of Ukraine celebrated the New Year at home, and the fourth part of them spent up to 500 hryvnias for the festive table. 21% of Ukrainians spent not more than 250 hryvnian, and only 9% of citizens were ready to spemd up to 1000 hryvnias. First of all, people were buying alcohol, especially cheap champaign, ingredients for salads, sweets.

It is not difficult to notice that the majority of people was indisposed to spend much even for such popular holiday as New Year, Hryshchenko says. "That is why cheap supermarkets become especially popular for winter holidays. Moreover, during this period people may not notice slight price rise and pay less attention to the quality of goods. By the way, almost all retail chains increase prices before New Year, but not all lower them afterwards," the expert says. An analyst of AAA company Maria Kolesnik specifies that in recent years supermarkets try not to exaggerate with New Year price rise, while traditional market squares increase prices for food by 15-20%.

Well, domestic retail chains have many things to offer for holidays for every day. The competition forces them to keep prices down and invent more and more new promotion actions and bonuses to attract more customers. Thus, according to the researches of GT Partners Ukraine, there are 59 retail food chains per one million Ukrainians (47 in 2010). However, it concerns large city, but the sector keeps developing in regions. Retail chains have their supermarkets in more than 200 cities of Ukraine. "There are still a number of towns with a population of 20 thousand, where the retail chains have not arrived yet. The majority of retail chains have been focused on million cities and regional centers. However, the expansion in district centers will happen within the next three or four years," director of GT Partners Ukraine Ihor Guglia says.

In general, retail chain business lives and develops, allowing Ukrainians to save money and at the same time to eat with quality. Even if we have not signed the Association agreement with Europe yet, such variety of choice is an important element of the European quality of life we are striving for.

Andriy Boyarunets


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