A huge part of business in Bulgarian consists of thousands of small family companies. These enterprises have a dominant position in the retail trade sector, where people can do business with little money. All Bulgarian villages, towns and cities overflow with small shops and street stalls. Customers like these shops, because they are literally everywhere, most of them are open seven days a week and work until late. Moreover, one can easily grasp the gossip of the neighborhood there. No one would think of going to the supermarket, which is often situated in the town suburbs, if for instance he needs to buy a loaf of bread, some milk and cheese only. However, the big supermarkets have continued their invasion in Bulgaria and their market share has been constantly rising. This is so, because these retail stores offer a wide range of products, thousands of food items and industrial goods, they often make discounts and people can buy everything they need for the whole week in one trip. We asked Petar Ivanov who owns a small district shop in Sofia whether he was worried about the invasion of the big supermarkets?

“No, I am not worried at all, because my shop has a good location and I have regular customers, which helps my business a lot. My food is always fresh, because I have deliveries on a regular basis. I do not have any problems with the big supermarkets and I can not complain at all.”

According to a recent survey made at the retail sector in Bulgaria, the small neighborhood shops have lost market share, to the expense of the big retail chains. If in 2007 the market share of the big hypermarkets amounted to 7% only, in 2011 their share has gone up to 14%. The so called modern trade in Bulgaria is represented by several big companies, mainly foreign, which have a firm presence in Europe, as well as on other continents. Several smaller Bulgarian companies are also there, although their market performance varies. Despite the latest trend, according to which the two groups-the supermarkets and the hypermarkets conquer higher market shares, these companies have started to face a series of difficulties, mainly financial. Their turnovers have gone up, their clients have multiplied, but their profits have not seen any increase, or literally dwindled. This was mainly due to the fact that the citizens of the poorest EU country have a very low purchasing power, although 45% of their family budget is spent on food. Sometimes the bill of a given client amounts to EUR 5-6 only, i.e. the profit of the big supermarkets from such clients is meager. According to the abovementioned survey, 10% of the trade with perishable goods in Bulgaria is due to the various market promotions and advertising campaigns, where the prices of these items are considerably lower. Due to these unfavorable conditions, some big Western European companies have left this country and sold their business to local or foreign investors.

However, it turns out that small retailers have started to bend under the pressure of the big retail chains, which on the other hand failed to reach their targeted profits. Perhaps the way out of this situation is some kind of a peaceful co-existence, equilibrium and a future balance of powers, where the most hospitable, attractive and original small district shops will continue to bring joy to their regular customers and the big retail chains will keep on filling the shopping trolleys of the Bulgarian households during their weekly shopping trip.

“I personally do my shopping from the big storehouses”, says Petar Ivanov who owns a small district shop in the Sofia city center. However, if I have to buy something exotic, I also visit the local hypermarkets, especially during the holidays, when I want to treat myself to some purchases as well.”

English version: Kostadin Atanasov