TALLINN - Rimi Baltic last week unveiled ambitious expansion plans for the Lithuanian market, firing a salvo in VP Market's own backyard.
The retail grocer, which is owned by Finland's Kesko Food and Sweden's ICA, said it would boost the number of its stores in Lithuania 's its weakest link in the Baltic states 's to 80 in the next three years. Ninety percent of these would be discount stores under the Supernetto brand name.
Rimi will soon open its first Supernetto store in Lithuania, according to a report issued by a creditor of Rimi Baltic.
"Our priority is to launch the Supernetto chain in Lithuania, whereas in parallel we will continue to strongly enhance our hypermarket presence," said Tom Nolet, CFO of Rimi Baltic.
"In Estonia, we put emphasis on maintaining our leading position by opening new discount stores and a limited number of new compact hypermarkets. In Latvia, we are still expanding the Supernetto chain. There is still sufficient space for further growth in hypermarkets and compact supermarkets in Latvia," he said.
By unfurling a chain of discount stores in Lithuania, where the dominant players are VP Market and Iki, Rimi will attempt to occupy an important niche and undercut the competition.
The merger of ICA's and Kesko's Baltic subsidiaries and its fast expansion are giving a push toward consolidation of the fragmented retail markets of the Baltic states and cutting down the weight of open-air marketplaces, said one market review.
Rimi Baltic AB owns the Rimi Hypermarket, Rimi, SuperNetto and Saastumarket brands.
The company reported this week that sales in the first seven months of 2005 reached 74.8 million euros in Lithuania, a 4.6 percent increase from last year's figure.
Total sales of Rimi Baltic in the three Baltic countries rose 22.9 percent year-on-year to 452.4 million euros in the January-to-July period. Growth was fastest in Latvia, surging 33.8 percent to 193 million euros. Sales in Estonia, where it dominates the retail grocery market, amounted to 184.6 million euros over the seven-month period, a rise of 21.1 percent from the year-earlier figure.
Rimi Baltic's chain comprises 20 hypermarkets, 66 supermarkets and 79 discount stores 's Supernetto and Saastumarket.
Kesko and ICA each holds 50 percent of Rimi Baltic.