Major supermarket chains in Albania are showing improved financial performance, driven by higher consumer spending and favorable market dynamics. Despite traditionally operating with relatively low-profit margins due to the nature of their business and the high level of informality in the unorganized retail market, recent years have marked significant progress, Monitor reports.
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| A woman carrying a supermarket trolley in a store in Tirana |
Growth Trends and Market Shifts
In the past two years, financial results have improved, influenced by increased consumption fueled by tourism and the mitigating effect of a weaker Euro on the cost of imported goods. Organized retail units are rapidly capturing market share from small stores, boosting revenues and profitability. Additionally, return rates have improved, supported by favorable exchange rates.
Big Market: Market Leader on the Rise
Big Market, the largest supermarket chain in Albania, reported consolidated revenues of approximately 26.6 billion ALL in 2023, an 8.7% increase compared to the previous year. Profits rose by 28%, reaching 1.5 billion ALL, while the return rate improved to 6.7%, up from 5% the year before. The chain has expanded to 180 locations and has diversified its non-food offerings, including textiles, stationery, and gardening products.
SPAR Albania: Rapid Expansion
SPAR Albania, part of the BALFIN Group, is the second-largest supermarket chain in the country. Consolidated revenues for 2023 were 18.8 billion ALL, marking a 16% year-over-year increase. Profit before taxes rose by 37%, reaching 890 million ALL, with a profit margin improving to 4.7% from 4%. SPAR operates 80 stores, with 38 managed directly and 42 under franchise agreements. The company plans further expansion and investments in technology to enhance efficiency in 2024.
Conad Albania: Navigating Challenges
Conad Albania reported revenues of 4.1 billion ALL, a 5.3% decline compared to the previous year. Despite the drop in revenue, profits increased by 9.2%, reaching 594 million ALL, with the profit margin improving to 14.4%. The company attributes this growth to the favorable exchange rate between the Lek and the Euro, which has reduced prices and boosted average purchases, balancing the decline in consumer prices.
Extramarket: Strong Growth in Revenue and Profit
Extramarket experienced a 15.2% increase in revenue, reaching 2.6 billion ALL, while profits surged by 33% to 167 million ALL, with a profit margin of 6.4%. Investments in infrastructure, warehousing, and distribution reorganization have contributed to its improved trading capacity.
Other Key Players
- Diambe, known for its discount model, grew revenues by 40%, reaching 3.8 billion ALL. Profits increased by 30%, totaling 145 million ALL.
- Eco Market Food, focusing on agricultural and livestock products, reported revenues of 3.4 billion ALL (5.7% growth) but posted modest pre-tax profits of 95 million ALL.
- Xhangolli, a newcomer to the rankings, saw revenues grow by 65% to 3.7 billion ALL, with minimal profits of 15 million ALL.
Strong Performers in Niche Markets
- Rossmann-Lala, a German-Albanian chain, posted a 30.3% growth in annual turnover, reaching 6.2 billion ALL. Profits climbed by 33% to 1.13 billion ALL, with a high profit margin of 16.4%.
- Megatek, the largest DIY hypermarket, reported revenues of 3.2 billion ALL and a 15% increase in profits to 524 million ALL, with a profit margin of 16.5%.
Anticipating Lidl’s Entry
The retail landscape is poised for further transformation with the anticipated entry of Lidl, the German discount grocery giant. Lidl is exploring opportunities in Albania, recognizing its potential as a market oriented toward high-quality products at competitive prices. Supported by Albania’s Foreign Investment Development Agency (AIDA) and the Port Authority of Durrës, Lidl is laying the groundwork for operations in the country.
Conclusion
The Albanian retail sector is undergoing significant evolution, with organized supermarket chains leading the shift from traditional retail to modern trade formats. Supported by growing consumer demand and strategic investments, these chains are well-positioned for continued growth in revenue and profitability.