Croatian Retail Industry in Croatian Hands

In contrast to many other CEE countries most of the market leaders in Croatia are domestic companies. However in some retail sectors there is still enough potential for further (foreign) investors.

Konzum, Lantea, Varteks, Brodomerkur or Planet obuca are only some of the leading names in the Croatian retail industry, who are market leaders in their sector. Especially in the food and electronics sector the top 3 market leaders according to their turnovers are Croatian companies. Among those few foreign players, who belong to the market leaders in the Croatian retail industry, are names like kika, dm, Müller, Bauhaus, Baumax or adidas.

The main reasons for the dominance of domestic retailers in Croatia are of political, economical and historical nature. The fact that Croatia is still not a member of the EU, the small size of the Croatian market as well as the existing structures from the Yugoslavian era made the market entrance for foreign players difficult and also ensured a good starting position for domestic retailers. Many foreign retailers hesitated or postponed the entrance into the Croatian market due to the prolonging of the EU accession negotiations or because of the limited market potential – Croatia being a small country, with only few large cities and small potential for good locations. Some companies, which have already existed in the Yugoslavian era, have been privatized and managed to survive successfully after the war in the new country of Croatia.

However as the example of Pevec (in 2009 market leader in the DIY sector) shows some of the Croatian retailers are not doing that well. Considering the high expansion speed and bad location choices Pevec’s sales figures did not keep up with their sales area. This is why the company had to file for bankruptcy. This means that there are still chances for companies concentrating on healthy growth and good locations. At the moment Pevec operates around 11 stores and is managed by an insolvency practicioner.