Russian Discount Chain Mere Could Open its First Store in Hungary this Year

The Russian discount chain Mere has arrived in Hungary and is preparing to open its first store, Világgazdaság reports. It now seems that the arrival of the Russian store is not an April Fool’s joke, but a real intention.

As reported by Hungary Today, the news that the Russian discounter was entering the Hungarian market hit the press on April 1. At the time, there were also reports of concrete investment plans, with plans to have 200 stores in the country within three years and a turnover of EUR 700 million. However, the first doubt arises when looking at these figures. Lidl, for instance, has about that many stores, but it took them about 15 years to achieve this. And a turnover of EUR 700 million would make it the eighth largest retail chain in the country by 2022. The fact that neither the government nor competitors knew about Mere’s arrival beforehand raises further doubts.

However, Világgazdaság has now received information from an unnamed source that makes it clear that Mere is serious about expanding in Hungary. According to the source, Mere is already in advanced negotiations on the location of specific stores. For the time being, it looks like

the Russian chain would set up five-five stores in three rounds, making a total of 15 stores in Hungary.

The chain is linking the realization of this to how the stores will be received by customers. The first round would start in Budapest and its agglomeration, followed by the big cities in the countryside, and finally smaller towns. Reportedly, their aim is to create a network of up to 100 Mere stores within 5-10 years.

Preparations are currently underway on two strands. According to the source, the documentation required for the opening of the store has already been compiled and will be submitted soon.

A decision on whether Mere will get the green light is expected by the end of the summer.

Negotiations are also under way to lease the property where the shops will be located. Mere does not want to build new shops, but to convert existing buildings, the portal writes.

Although it is difficult to move forward with these processes, concrete steps have already been taken. A contract is close to being signed for the lease of a property in Budapest’s 4th district, in Újpest, as well as in Vác (near Budapest) and Szeged (southern Hungary).

The first Mere store could open in Újpest by the end of this year.

If Mere does indeed open a store, it will represent a new retail model in Hungary. Although it is often referred to as a Russian Lidl or Aldi, Mere operates on a completely different principle. It will be less convenient, as its access will most certainly require a car, but in return it could be up to a third cheaper, with margins as low as 15% compared to the usual retail level of 45-60%.

According to Világgazdaság,

Mere in Hungary will have a maximum offer of 500 products, 80 percent of which will come from the well-established Hungarian suppliers.

The remainder may be supplied by mainly domestic producers who have not necessarily made it onto the shelves of retail chains. Mere is clearly appealing to the price-sensitive nature of Hungarian consumers in its business model. However, to be a real competitor to Lidl, which is by far the first in the country, or Aldi, another German discount chain, it is also essential that it operates reliably and professionally and expands steadily. Whether it will be able to do so remains to be seen.

Via Világgazdaság, Featured image: mere.ws