Local strategy delivers profits

  • 2010-01-20
  • From wire reports

TALLINN - Estonia-based grocery store chain Elektra, selling locally sourced products, reported first half 2009 profits of 30 million kroons (1.9 million euros), reports bbn.ee. The company’s owner, Oleg Gross, says that his business is flourishing despite these economic hard times, because Elektra “leases nothing, has taken practically no bank loans and the number of employees has been cut to an optimal level.” Gross promotes the business strategy that Estonians should consume local products.

The entrepreneur started his business in late 1980s by importing a few hundred Lada passenger cars from Siberia to Estonia on military transport aircraft. He then switched direction to importing cheap German vodka to Estonia, and even opened a few vodka vending kiosks near Rakvere. These kiosks were to later became his grocery stores.
The grocery stores sell sausages, meat and confectionery products that are made entirely in Estonia. Raw materials are supplied by his farms and the goods are delivered with his vans.
Fellow businessmen say that he is running his companies “like a household” and when physical work needs to be done urgently, Gross is “not shy to join in.” Gross keeps the company’s head office in his home, a huge villa behind a high fence with a pool in the living room.

He is also a colorful character around town. He was one of the first Estonians to buy a Hummer. He himself explained that his board had just decided to reward the company with a new car for excellent results, and that Estonia’s first Hummer dealership had just been opened. He is also rumored to have founded his own newspaper when he did not like the articles written about him in the local county paper.
Business daily Aripaev writes that in spite of the economic crisis, Elektra ended 2008 with revenues of over 1 billion kroons and profit of 54 million kroons.

Elektra was founded in 1992 and now includes 34 stores. Aripaev estimated last year that Oleg Gross was worth 624 million kroons which makes him the 33rd richest businessman in Estonia.