Budget Russian supermarket chain Mere ready for launch in Spain

A RUSSIAN low-cost supermarket chain is set to land in Spain this year and is expected to have a mainstream high-street presence nationwide by the year 2025.

Owned by the Svetofor Group, Mere supermarkets are based upon the format of Aldi and Lidl as they were when they first arrived in the country, and prices are said to be between 10% and 20% cheaper than in Spain's existing network of stores.

Managing director of Mere Spain, Andrey Murzov, describes the chain as 'spartan' and 'no-frills', with no shelves, display units or even staff.

“Everything is stocked on pallets or in boxes, in order to reduce overheads as much as possible and be able to offer very cheap products,” Murzov explains.

“This model of store is similar to what Lidl and Aldi used to use years ago.

“Our aim is to offer the best prices every day, thanks to a business concept that involves saving costs – rent, decoration, and personnel.”

The first branches will open in May this year, between 10 and 15 are planned by the end of 2021, and around 100 are expected to be trading in the country by the year 2025.

Regions targeted for Mere's expansion are likely to be Madrid, Murcia, the Comunidad Valenciana, Catalunya, and Andalucía.

But is ‘no-frills’ really a market winner in Spain?

Concerns have been raised about whether this will start a 'race to the bottom' at the expense of jobs in the retail sector, but market research on consumer expectations in Spain shows this appears very unlikely.

Once the worst of the financial crisis years, from 2008 to 2012, had passed, lowest-possible cost stopped being the main focus when grocery shopping – surveys have found that customers actually value the look and layout of a store, as well as variety, quality and service.

Whilst German chains Lidl and Aldi started out in Spain as bottom-budget choices, with goods – mostly, if not all, packaged – stacked up on wooden pallets or in large cardboard boxes on the floor, with narrow aisles and limited employees, these have now become more spacious, with better lighting, clearly-marked sections, and a greater emphasis on fresh produce such as fruit and vegetables, including affordable organic sections, bread and cakes hand-made on the premises and still warm when they hit the shelves, freshly-caught fish and fresh meat, and their prices are similar to the most prevalent supermarket chains such as Mercadona, Consum, Mas y Mas, Spar, and Día.

Fresh produce is far more popular and makes up a larger percentage of the household shop in Spain, with the majority of consumers counting these as kitchen staples; elsewhere in Europe, particularly in more northerly countries, ready meals, processed and packaged food and tinned goods carry much more weight.

Also, own-brand goods have a much greater presence on Spanish supermarket shelves at the expense of independent brands; in some chains, these make up over 90% of stock.

But unlike in many northern European countries, the shop's own brand is generally of high quality and viewed as such by consumers.

Mere does not have its own brand, but 'has not ruled out' that other manufacturers may sell their goods in these stores under a different name at a lower price as a loss-leader or cash-cow, according to Murzov.

Svetofor, owned by the Schneider family, started its expansion into the European continent in 2017 and is currently trading in Romania, Germany, Poland, Ukraine, and Lithuania – where it opened 10 stores within eight months, all of which have been a huge success for the company – and plans to launch shortly in Bulgaria, Greece and Italy.

It opened its head office in Barcelona in February 2020, says Murzov.