Mercator Pulls Back 2009 Forecast But Not Regional Expansion Plans

Slovenia's leading mass grocery retailer (MGR) Mercator has revised down its year-end 2009 forecasts on the back of a worse than excepted dip in consumer confidence across the Balkan region. Mercator expects its net income to slide by 50% year-on-year (y-o-y) this year to EUR20.5mn with sales remaining unmoved at EUR2.7bn. Despite the regional upheaval inflicted by the global economic meltdown, Mercator is expected to carry through with plans to further bolster its regional presence by entering Albania and Bulgaria this year (it is also expected to enter Macedonia and Kosovo by 2012). In BMI's opinion, rather than aim to establish modest positions in some of Central and Eastern Europe's more developed MGR markets, Mercator is wisely focusing on lower-income markets with fragmented MGR industries that have yet to truly take-off.

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