Serbia Market Overview. Bord Bia, Frankfurt November 27 th 2008

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1 Serbia Market Overview Bord Bia, Frankfurt November 27 th 2008

2 Serbian Market Overview Population: 8.03 million (excl. Kosovo) Belgrade (Capital) 1,120,400 Novi SAD 299,300 Nis 173,800 and Burgas Kragujevac 146,300 Language: Serbian Currency: Serbian Dinar 1 = 83.9 CSD (IGD, October 2008) Looking to join the EU

3 Market Overview GDP Growth - real growth rate 6.5% 2008(e) (IGD, 2008) Inflation rate: 7.8% (2008(e)) (IGD, 2008) Unemployment: 24% (2008(e)) (IGD, 2008) Grocery Retail Spending per capita is increasing; up from 367 in 2004 to 623 in 2008 (e) (IGD, 2008) VAT on goods and services: 18% VAT on food, medicines and books: 8% VAT on rent, donations and education: 0%

4 Irish Export Performance 2007 Total Value of Exports: 3 mn Miscellaneous edible products 90% Coffee, tea cocoa, spices & manufactures 0.4% Vegetables & fruit Meat 2% Source: CSO Trade Statistics 2008

5 Key Consumer Trends in the Market Solid growth in retail sector Per capita spending is increasing but is still significantly lower than in Western Europe. 44% of retail sales in Serbia are generated through the food retail sector (e) ( ) ( ) ( ) Total Retail Market (billions) Grocery Retail Market (billions) Grocery Retail Spend/capita Source: IGD Country Presentations, 2008

Retail Grocery Market Grocery Retail Value: 6.33 billion (IGD, 2008) Small grocery stores are the most populous of format with some 67% share of trade.

6 Retail Grocery Market Grocery Retail Value: 6.33 billion (IGD, 2008) Small grocery stores are the most populous of format with some 67% share of trade. There are around 30,000 independent stores operating around the country (IGD, 2008). Discounters are not currently part of the retail format, although Serbians are price sensitive. The state retains discretionary authority over price changes of basic goods such as milk, bread and cooking oil. Modern retail developments are centred around Belgrade.

7 Retail Grocery Market Cash & Carry sector: Tempo (part of Delta Maxi) was the first Cash & Carry to open in They have 4 stores and offer up to 50,000 SKU s. Metro entered in 2005 and have 5 stores saw a 37.5% increase in turnover for Metro. Hypermarkets: account for 5% of market share. Tempo are the biggest in terms of turnover despite only having 4 stores. But this market is a high growth one for the Metro Group, as turnover rose 37.5% in Other players include MercatorCentre / Rodic Megamarket, Idea, Vero, and Supermaxi. Supermarkets: account for 17% of market share. The biggest supermarket chain is Maxi, who acquired the previously largest supermarket chain - C Market - in Other big chains include Rodic supermarket, Si Market, and Interex. Interex plan on using Serbia as the base for their expansion into South East Europe.

8 Retail Market Share Other 70% Super Vero 1% Metro 2% Interex 2% Univerexport 2% Mercator & Rodic 6% Delta 17% Source: IGD Analysis Country Presentation Serbia 2008

9 Top Retailers 2007 Retailer Total Sales m Grocery Sales m % Change Grocery Sales 2007 v 2006 Grocery Retail Market Share (%) No. of Stores Delta Holding 1,720 1, Mercator/ Rodic Metro Idea (Konzum) Simpo Interex (Intermarche) Super Vero (Veropoulos) Source: IGD Analysis, Country Presentation Serbia, 2008

10 Facts about Serbia Serbia is one of the poorest markets in Central and Eastern Europe, and this is combined with political uncertainty which further hampers economic advancement. However, as the country hopes to join the EU this makes it a market with growth opportunities. Presently the high unemployment and inflation deters foreign investment. Government corruption is common and the black market is still a major problem despite new custom and tax laws which reduced illegal imports. Serbia has a free trade agreement with Russia.

Foodservice Trends The Serbian diet is traditionally heavy on grilled meat, sausages, local cheeses and bread.

For example: Rostilj (as seen in the picture on the right) is made up of various unseasoned grilled meat and can include chicken

Pljeskavica: Traditional pljeskavica was made from a mixture of lamb or pork and beef, grilled with onions and served hot on fresh

11 Foodservice Trends The Serbian diet is traditionally heavy on grilled meat, sausages, local cheeses and bread. There are a number of local dishes which highlight this. For example: Rostilj (as seen in the picture on the right) is made up of various unseasoned grilled meat and can include chicken wrapped in bacon and stuffed with cheese. Pljeskavica: Traditional pljeskavica was made from a mixture of lamb or pork and beef, grilled with onions and served hot on fresh somun with a thick pita bread. This can be up to 5 times bigger than an American hamburger! Bakeries can be found everywhere in Serbia and cater to the food to go aspect of life. Pekara SUNCE is one such bakery. Adapted from Serbia Investment and Export Promotion Agency,, Travel Serbia and Serbia Tourist Guide.

Foodservice Establishments McDonald s Entered the market in the late 1980 s Operates 13 outlets in Serbia Offers tailored menu options such as a Cordon Bleu in a burger bun, Croquettes with meat

12 Foodservice Establishments McDonald s Entered the market in the late 1980 s Operates 13 outlets in Serbia Offers tailored menu options such as a Cordon Bleu in a burger bun, Croquettes with meat and cheese. The Economist has named McDonald s as one of the Top 300 companies in 1999, 2000, 2001 and In 2007 they were named as a super brand. Source: McDonald s website, Serbia, November 2008.

Foodservice Establishments International restaurants are few in number in Serbia and as such there are few chains. Here are a few of the better known restaurants in Serbia.

13 Foodservice Establishments International restaurants are few in number in Serbia and as such there are few chains. Here are a few of the better known restaurants in Serbia. Peking Restaurant The oldest Chinese restaurant in Belgrade Have won numerous awards over the years. For example the Champion of Quality at the Novi Sad Fair Zapata The only Mexican restaurant in Belgrade Offers traditional Mexican food Opened in 2005

14 Foodservice Establishments Pizza Hut and KFC Operate in the market under the American Restaurant Company - Poland based. KFC opened its first outlet in November Both can be found in Belgrade.

15 Reasons for targeting Serbia Currently seeking membership of EU (though not scheduled to join before 2012) One of 3 fastest growing retail markets in Central and Eastern Europe, behind Russia and Bosnia and followed by Turkey and Ukraine (IGD)

16 Barriers/challenges in supplying Serbian market Political unrest (Kosovo/Montenegro) 24% unemployment Language barrier adds to difficulty in making contacts and obtaining market information.

17 Bord Bia services 2009 Bord Bia market mentor (Mr. Kieran Fahy) available for Eastern Europe market and trade related queries: Services include: Itinerary Development, Category Analysis, Media review and translation services, Product Price auditing and tracking, Product retrieval, Buyer networking, Distributor searches Kieran Fahy Also: Liam MacHale Sarospatak ut 32 Bord Bia 1125 Budapest Wöhler Str. 3-5 Hungary Frankfurt, Germany Tel: Tel

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