'Torgservis' Group creates foothold on German soil

Russian discounter opens first branch in Leipzig, named 'Mere'

Sporting the slogan "Only Lowest Prices Everyday", the first branch of Russian grocery retailer Torgservis, name "Mere", opened in a former Aldi market in Leipzig.

Against this backdrop, trade union Nahrung-Genuss-Gaststätten (NGG) warned of a food stuff price war. The opening of the first German branch of Russian discounter "Torgservis" was an "alarm signal", said NGG chairman Guido Zeitler. "If you promise to drastically undercut the already cheap food discounters in Germany, this will continue to add to the spiralling of pricesl. But foods are quality products that must not be sold below their value," added Zeitler. "Food should not be junk. In the food industry, the dropping prices are leading to lower wages and worse working conditions, or even job cuts," concludes the union man.

Junior Professor Erik Maier of the Handelshochschule Leipzig thinks that Russian food discounter Torgservis with German subsidiary TS-Markt only has a small chance in the German market. "Formats like this discounter, tried on the German market before, have all failed. If branches were to remain, they are more of a marginal phenomenon with a narrow target group," said the expert for trade and multi-channel management in an interview with MDR magazine Umschau.

"We first want to gain a foothold in East Germany," says the company. According to media reports, the company wants to open 100 stores in Germany. "Even if they actually open these 100 branches, it's impossible to compete with discounters like Aldi or Lidl," Maier added. In the view of this trade expert, the margins in the German food trade are very low and the power of the "top dogs" is very large: "Goods that are 20% cheaper than those at Aldi, I can imagine for certain products. In addition to this, they sell products that are not available in other markets or goods of low quality."


Russen-Discounter Mere attacks Aldi, Lidl and others. (Source: Bild)

Sources: NGG, Umschau, Welt


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