The major chains are dividing individual shops

Major foreign and local retailers – Rimi, VP Market, Comarket and OG Elektra are competing over individual shops and new sales areas in Tallinn.

The joining of individual shops with chains was forecast a couple of years ago and is presently in full operation, especially in case of the former ABC type of shops in the district of Mustamäe and Õismäe.

The Lithuanian VP Market opens its first discounters in the former shops of Liivaku and Tedre in Tallinn and a store will also be established in Maardu. Nurmenuku shop will be added to the Rimi chain and probably the food product department of Viimsi Market as well.

The local chain of Comarket will start its operation in the present Marja shop starting from summer. Recently, OG Elektra got hold of Paasiku 2 in Lasnamäe in which a new shop will be established for spring. In addition, the enterprise has bought the registered immovable in Ehitajate tee 41 and it is possible that OG Elektra will settle in one of the Känguru chain shops – located in Tammsaare  tee 93 which is on sale right now and which matches the format of the Elektra chain.

“Local shops are our niche – there are quite many of them in Tallinn which we could take,” said Oleg Gross, the owner of OG Elektra. While talking about his new shops he remarks that he has no competitors in Paasiku. Because of the detailed plan process in Ehitajate tee, the construction works of the shop can only be started in the summer of the next year. According to Gross, he was also interested in the Nurmenuku shop.

Jüri Vips, the chairman of the board of Comarket, admitted that nobody wanted to talk in detail about their expansion plans. He added that Comarket had collaboration partners for subsequent operations. “We will keep our style and the chain will be branded this year in Tallinn.” Vips said that if presently Comarket is engaged with bigger shops as Marja shop with 800 square metres then the next year smaller shops will follow.

Karmo Laas-Lutsberg, the manager of Rimi chain, said that the trend of individual shops becoming part of a chain cannot be avoided as the competitiveness is growing and individual shops cannot compete with the chain shops regarding the price scale, shopping environment and marketing assistance.

According to Ireen Mitmann, the Tallinn office manager of VP Market, it is difficult to forecast when the shops in Sütiste and Nõmme tee will be opened: “We will make our best to open them in June.”

Marja shop as an individual shop became powerless.

The owners of the Marja shop will rent the sales area to Comarket starting from July 1 as it proved to be difficult to operate alone and compete with the price policy of major chains.

“It is obvious that operating with one shop will be difficult in the present retail business competition,” said Eva Nõulik, the member of the board of AS Marja MR, the owner company of the Marja shop. He added that the last drop had been the opening of Säästumarket next to the Marja shop in February this year – it makes no sense to compete with the prices of Kesko Group with an individual shop.

Nõulik estimates that by the end of this year the biggest individual shops will have joined with chains which keep actively looking for places to expand: “They all have major plans – they want to establish 30 shops to Tallinn and that is why they apply for the same shops.”

Nõulik said that in addition to Comarket they also negotiated with VP Market owned by Lithuanians. “Firstly, our conception and the conception of Comarket are closer,” she explains the choice and refers to the fact that VP Market would have pulled down a great deal of the building and would have rebuilt it. “Secondly – we are dealing with the Estonian trade.”