ECONOMY

Atlantic leads in terms of growth in mid-sized supermarket chains

Consumers primarily used supermarkets as foreign exchange outlets during the changeover period after the introduction of the euro just over a year ago, says Manolis Apostolou, managing director of Atlantic supermarket chain, Greece’s second largest by number of branches. This was largely responsible for the 75 percent boost to the company’s turnover last year, he believes. «The year 2002 ended on the best possible terms for us; sales were up 75 percent, operating profit rose around 60 percent and net profit about 30 percent. Even more important is the fact that we now count six new branches, boosting our core profitability and extending our presence in the provinces,» he says. However, prospects for 2003 are less rosy and sales performance is expected to be lukewarm. «Nevertheless, Atlantic has planned an aggressive policy for this period and we believe that with the right organization and cost savings we will further boost profitability, and, particularly, turnover, which is our main concern,» says Apostolou. The company is not in favor of price wars, he hastens to add. «We focus on strengthening the consumer’s fidelity and we reward it.» Part of this market effort is Atlantic’s monthly magazine, Welcome, its large database and the Atlantic Welcome Club. Last year set new priorities among consumers, who now appear more clear in their choices. «The consumer is clearly more sensitized on quality issues; he is much more demanding, has learned to be selective and you cannot fool him. He seeks the best value for money. Nevertheless, September 11 may not have had such dramatic effects on our profitability, but it had tragic effects on our economy in general. The domino effect has hit us, too,» Apostolou says. The euro certainly caused price hikes but not to the extent claimed. Besides, when the oil price hits $30 per barrel, one cannot avoid putting up some prices, he says. «In our case, these have been no more than 2.5-3.0 percent, in contrast to public utilities.» The company has planned five specific investment projects for 2003: expansion of the network with four or five new branches, refurbishment of 30-35 existing branches, development of fresh produce sections, further staff training, and expansion into the cash-and-carry business and franchising. Atlantic, which is Greece’s 12th largest commercial enterprise and fifth among supermarket chains in terms of sales, in partnership with Finnish firm Cesco, a Finnish university and the Athens School of Economics, has launched a pilot program for electronic sales through mobile phones and credit cards. But Apostolou is certain that electronic sales will never fully supplant retail sales in real time and space. He says trends in the Greek market favor the development of medium-size neighborhood outlets, measuring between 400 and 1,500 square meters. «We are happy to see competing small chains develop along these lines, as we were the first to do it successfully.»