Shops “for the poor” had gone to the regions

Hegd06ionalnye authorities undertook the development of social shopping …

by admin on February 17th, 2010

Local authorities seem concerned about the development of social stores - opened in Dnipropetrovsk social mini-markets “Avoska” in Mariupol appeared Slavutich, in Kremenchug - Optovichok. The real competition to existing networks, they do not create - suppliers of such outlets just are looking at, but experts say their only means of PR for the officials.

According to the head of the trade, food industry and services the Dnepropetrovsk city council Helena Bocharnikova, in January 2010 in the sleeping areas of the city was open for about 40 trading pavilions, organized on the principle of mini-markets.

Social stores in Dnepropetrovsk should have been opened much earlier in the form of municipal trading network (its formation made at the session of the City Council is June 10, 2009). However, later in the project city government attracted investors (Charitable Foundation Pridneprovsk food bank). According to Elena Bocharnikova originally anticipated that the investment in one store will be around 80-90 thousand UAH. But in the end it turned out that in each of the pavilions had to invest almost 300 thousand UAH.

“On average, invest only in equipment for a shop area of 45 m2 are $ 10-15 thousand,” - said the managing partner GT Partners Ukraine Alexander Timofeev.

This “shopping at home, walking distance, providing an essential food (dairy and bakery products, cereals, meat) at prices 7-10% lower than in supermarkets. Results in the framework of the municipal authorities of the project to build a network of social stores in Dnipropetrovsk will create 150-160 such outlets. Similar sotsmagaziny also appeared in Mariupol, Ivano-Frankivsk, Kremenchug.

Manufacturers now evaluate the pros and cons of possible cooperation with sotsmagami. In particular, for their work are looking at in the company of “Native product” (producer of cereals, Dnepropetrovsk). At the same time its CEO Andrew Rudenko believes that such projects should be implemented not only the efforts of businesses, but also with the active participation of the state. He argues his position that the products offered in the social shopping networks, as a rule, very cheap, and in some cases, the price is even lower than the cost from the manufacturer.

“to enable enterprises to offer a lower price, without compromising the quality, the state must provide him with strong support (incentives in taxation, or any other concessions). Otherwise it would be only a temporary one-time projects”, - says Rudenko. Alexander Timofeev says: work in a zero on its own initiative, none of the vendors do not want to, so to encourage manufacturers to supply products to social shopping will be difficult.

“Using administrative resources, can affect suppliers, requiring them to minimize the prices of some items. But what will the quality of the delivered goods - big question. Any restriction on a social product only lead to a deterioration of the formulation and reduce their weight (in the case of packaged goods), “- adds managing partner and creative director of ADviral Anton Beletsky. According to him, products that retail chains are implemented within their own social programs, as a rule, inferior in quality branded goods.

At the same time the chairman of the Association of manufacturers and suppliers of Ukraine (APPU), Vladimir Javorsky sure that the domestic market reteyla alternative to supermarkets in the form of social shopping still needed.

“Networking, selling products with a minimum mark-up over the next year or two will be important. The main thing is that such outlets are able to attract consumers and ensure the realization of the goods, then the company would willingly supply their products there,” - he is convinced .

regional scale producers find it increasingly difficult to achieve presence on the shelves of major regional players. National networks severely tightened the conditions for suppliers (with respect to delayed payment for goods delivered, bonus systems), because of what some of the vendors were forced to leave the major networks. Those who remained, to put all the additional financial burden on the price of goods. At present, mark-up on food in the normal commercial networks range from 20 to 50%, most often it”s size varies from 30-40% (information APPU).

Although the company may reduce the selling prices on the value of so-called advertising and marketing budgets in the absence of extortion on the part of retailers. Anton Beleckij notes that most manufacturers do not have their own system of distribution and logistics, respectively, it is economically inefficient to supply products to sotsmagaziny independently.

At the same time, the margin in the modern social stores 10-15% is a smile from the experts, since the concept involves the sale of goods without any allowance at all. It explains the general director of consulting firm GT Partners Ukraine Igor of Google, social stores sell goods quickly turn around, and thus able to provide producers a continuous cash flow that the current conditions for suppliers is extremely important.

According to general director of the network, “Our Land” Victor Molchenko to social networks in Ukraine was really an analog of European discounters (prototypes of our sotssetey), they should not be limited to selling only the products of a social group, since the products are present today in many supermarkets, who sold it to a minimum mark-up or on special actions.

The durability and effectiveness of social stores in the regions of industry experts are skeptical. Director of research company RetailStudio Michael Gryshchenko sure that these outlets are impractical and will hold on until then, until the local authority or a separate policy, the landlord has an interest in it and the means for investment. In his view, social shop - this is more a PR move, which allows local authorities or individual politicians to form a positive image, rather than an effective retail technology. Confirmation of this - the failure of the plan to create a large social network of shops in the capital. In 2006-2007 in the central areas of the city were installed wooden huts, which were to offer Kievans social groups of goods at low prices.

But in practice, the price they were even higher than in conventional supermarkets, it is not surprising that after a certain time, these cottages have sunk into oblivion. But exactly one year ago (January 2009) mayor of Kiev Leonid Chernovetsky signed a decree on the establishment of a public utility “Home Store” and said the opening of 1500 new outlets. However, as of today all over Kiev to operate no more than a dozen.

experts believe: that the social outlets are to be effective and cost-effective to build a large distribution network nationwide. Michael Gryshchenko sure: an efficient retail trade - is the technology. Moreover, the technology does not work the outlet (supply - the location on the trading floor - layout - the actual sale), but also the whole supply chain - from production to consumption. Modern retail chains provide effective functioning of the supply chain. Local authorities are unlikely to do so because of the lack of a minimum of resources: knowledge, experience, organizational capacity, finance and much more.

“At the local scale, for example at the level of the city, waiting for some results that will say that these shops will make a real competition to professional network operators do not have to” - summarizes Igor of Google.

Svetlana Popel

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