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The announcement that Slovenian retailer Mercator may sell up in Albania highlights the difficulty that big foreign retail chains face in Albania’s fragmented and impoverished market.
“There has been an overcrowding of the Albanian market by international retailers in the last few years and increased competition,” Ornela Liperi, editor of the Tirana business weekly Monitor told Balkan Insight.
“Fierce competition and sluggish demand from consumers due to the economic crisis might explain a possible exit,” she added.
Consumer demand in Albania has been badly affected in the last year due to the debt crisis in Greece and Italy, the country’s main trading partners, which host more than a million Albanian emigrants.
“Consumers continue to be oriented toward savings by postponing important economic decisions,” Albania’s central bank governor said last week.
Toni Bazic, the new chief executive of Mercator, told Reuters news agency that the company was considering selling up in Albania and Bulgaria as part of larger cost-cutting drive that includes also the sale of some real estate.
Mercator opened its first hypermarket in Tirana in December 2009 and currently also operates two neighbourhood stores, with 0.8 per cent share of the total retail market in Albania, worth €700 million.
The company's revenues in Albania in 2011 were 5.3 million euro. Several other international food retailers operate in Albania, including Conad, Carrefour and the Belgian Delhaze.
The largest retailer is Delhaze with 3.2 per cent of the market, while traditional and fragmentized forms of retail account for the lion's share.
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