Billa bets on smaller store formats for expansion

Billa Romania, the largest supermarket network, is set to expand in at least ten new locations this year, counting on a format of supermarkets with a smaller area than the network average.

Wolfgang Janisch, Billa Romania CEO, says the changes the retailer has embraced in terms of its expansion strategy and prices have come as a response to the current market conditions. Consumers have become more cautious about expenditures in recent months as a result of the deteriorating economic environment, but retailers are still betting on the food sector’s endurance in the face of the global economic crisis. “Stores with sales areas of 1,000 square metres (around half of the current average of Billa network i.e.) allow us to get closer to customers and, moreover, we consider this is the best size for our food range,” stated Janisch. He is counting on a rising number of customers in convenience stores, as many consumers will be no longer willing to spend money on petrol to go shopping. Billa will open a store with a sales area of around 500 square metres in Sibiu this month, the 35th store of the Romanian network, as reported by Mediafax. The average area of Billa stores to be opened domestically in the future will stand at 1,200 square metres, because the retailer is no longer interested in larger stores. At the same time, the company last year cut the sales space of its supermarkets of Cluj-Napoca and Craiova, in the wake of modernisation works. Another three supermarkets will be refurbished this year, but their area will not be modified, according to Janisch. Billa’s boss also said there would be some changes in the product supply. “We’ll further strengthen our own label Clever, which covers the entry-level segment and has very good sales,” Janisch said. Last year, the network added six stores and this year plans to step up its expansion pace. Janisch was also quoted as saying by Mediafax that the current real estate market crisis could be an opportunity for Billa in terms of expansion, as it expects the prices of targeted locations to go down. Though Billa also mulls expansion through network acquisitions, Janisch says talks held so far with owners interested in selling their stores have not reached an advanced stage.