Lack of money bigger problem than high prices

According to experts, the arrival of the German supermarket chain Lidl to Serbia does not automatically mean that the prices at supermarkets will go down. They say that the competition is good because it encourages retailers to further develop. However, one of the main problems in our country is the low purchasing power of citizens, with an average Serbian citizen spending only 450 dinars a day on buying food.

“Serbian supermarkets are already working with low margins, so the arrival of new “players” will not bring anything new to consumers. The average margin in Serbia for food products is 8 percent. Thus, the only thing that the arrival of Lidl will bring to our country is a greater choice of goods, nothing else. Our biggest problem is the low purchasing power of the population, not high prices. When an ordinary Serbian citizen goes to a store, they spend 450 dinars on average. In Italy this is 22 euro, and in some countries up to 100 euro. So, in that sense, we cannot expect big benefits for consumers”, says Zarko Malinovic, Secretary General of the Association of Retailers at the Serbian Chamber of Commerce.

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In Western countries, especially in Germany, prices of food and other products sold at supermarket chains are lower than ours. Malinovic argues that that is not the entire truth and that such analyses should be carefully done.

“Retailers in Europe have better conditions, a larger market and the population has a higher purchasing power. These are their main advantages. There are also a lot of logistics costs in our country, as there are many participants in the supply chain”, Malinovic adds.

Lidl will launch its operations in Serbia by the end of the year, when it plans to open between 10 and 20 stores across Serbia in one day.

“We are cooperating, first and foremost, with domestic suppliers, to ensure the expected quality and freshness of our brands, as well as a product range that meets the needs of the domestic market.  Domestic suppliers will be represented by more than 350 products, through local brands which are going to be sold in Serbia under Lidl brands”, the German supermarket chain explains.

Better quality

“Everybody is talking about the greater competition and lower prices, but I hope they will stick to their business policies, so they will do business in Serbia just like in other country. I expect Lidl to sell quality goods at lower prices. It is a good thing that a big percentage of domestic producers will be working for the Lidl brand”, explains Goran Papovic, President of the National Consumer Organization of Serbia.

(Vecernje Novosti, 06.08.2018)

This post is also available in: Italiano

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