Carrefour expands its Romanian empire

Annual investment is expected to reach €33.9m in 2006, €23.9m for 2007 and €23.8m for 2008 - in addition to the €140m which has just been invested in the doubling of Carrefour's new Hyperlo hypermarket chain from four to eight.

According to Romanian newspaper reports, Carrefour has already purchased a plot in Sofia where it plans to build a large trade centre with four shopping floors and a total retail space of 70,523sq metres.

However, the French retailer is awaiting a government investment certificate ensuring state aid for the construction of all needed infrastructure connected with the project. This is expected in the next week, and until it is received construction will be held back.

At the end of last year Carrefour said it would take control of Hyparlo, its biggest franchise, having acquired a large stake in the company earlier in the year - but awaited EU approval for the deal for six months.

Hyparlo is a success story in Romania and the retailer was keen to extend its operations there after entering the market in 2001 with a single store in Western Bucharest.

Strong performance last year brought Hyparlo Romania's total sales figures to €435m, making it an attractive acquisition target.

Since Carrefour took full ownership of the chain, it has opened four more stores in Bucharest, Brasove and most recently in Ploiesti, and analysts predict strong growth will be maintained over the next few years.

Carrefour has defied all odds in its success on the Romanian market, recording a 64 per cent rise in sales last year following a consumer-led lending boom and the introduction of a wealth generating flat tax system.

The massive increase in sales makes Carrefour the country's number two retailer, second only to Germany's Metro Group.

According to Planet Retail's Central and Eastern European analyst Boris Planer, "Romania appears on the radar of the big retailers"​ due to its anticipated EC accession in 2007 - making it an attractive proposition for western European supermarkets.

International retailers have sought to capitalise on the emerging markets of Eastern Europe since the mid-1990s as the Western European markets became increasingly saturated. Figures from retail research group IGD show that food retail per capita is significantly lower in Eastern Europe than Central Europe, suggesting there is real potential when these markets mature.

Eastern Europe as a whole has a grocery market value of €187.8 billion, compared to that of the UK, which is €176.7 billion.