Category Archives: Retail

Lets talk about wine

You can get great bottle of wine in Bulgaria for 4€. And it’s not fake wine as sold in discount stores.

Wine Industry in Bulgaria

There are different industries in Bulgarian economy that have a high potential growth rate. Among these industries is the wine industry. Notably, the wines’ sector is the most competitive sectors in food industry in Bulgaria.

To begin with, while Bulgaria is yet to gain the fame as a wine producer such as Italy, Spain and France, this country is the second largest producer of bottled wine across the globe. Moreover, Bulgaria is one of the producers of the finest wine in the world. Statistics indicate that the wine industry is Bulgaria has been growing steadily in the last few years. For example, in 2013, the wine industry in this country grew by 45%. In this regard, the country produced between 180 million and 200 million liters of wine as compared to 127 million liters of wine in 2012. Statistics further point to the fact that in the first six months of 2013, Bulgaria exported close to 28.2 million liters of wine, which represented a 5.8% growth in wine export compared to the first six month of 2012.

The export markets of the Bulgarian wine industry include China, Britain, Russia, the United States and Vietnam. Since the beginning of 2014, Bulgaria has exported more than 22 million liters of wine to different markets across the globe. Importantly, half of this export went to Russia, which is the main market of the Bulgarian wine. Similarly, statistics point to the fact that the United States is also a major market for the Bulgarian wine. Notably, the American businessman Robert Hike, who already imports wine from Bulgaria to the United States, is planning to increase his volume of wine import from Bulgaria to the United States to 40 million bottles in the next five years. In addition to this, Vietnamese companies recently signed a trade deal that will see Bulgaria export 500,000 liters of its wine to Vietnam. With respect to the Chinese market, it is expected that Bulgaria will be exporting close to one million of liters of its wine to this nation every year.

Studies indicate that Bulgaria grows close to 100,000 hectares of grapes for commercial purposes. On the other hand, a further 60,000 hectares of grapes is owned by farmers. With this in mind, the average annual yield of grapes in this country is estimated at 230,000 to 250,000 tons. Similarly, the average production capacity of the wine industry in Bulgaria is estimated at 10 million hectoliters.

Importantly, the grape yield in this country is expected to grow tremendously in the next few years owing to the introduction of new type of grapes that are resistant to droughts, diseases and pests. Moreover, the entrance of new investors in the wine industry will boost its production capacity in the next few years.

Speaking from this perspective, the wine industry in Bulgaria is one of the most promising industries that would yield high returns on investment in the next few years. And wines are amazing. You should try it!

Real estate ugly duck or a cheap princess?

The Bulgarian real estate sector has gone through numerous transformations since 1950, which are grouped in three phases. Importantly, this country’s political and economic development had an influence on how each phase developed. To begin with, the first phase in the real estate sector in Bulgaria is associated with socialism, i.e. post World War II to 1990.

During this period, the government had a firm control over nearly every activity in the real estate industry. For example, consumers needed approval from the government to purchase a property. Moreover, the laws and regulations during this period limited the property that one could buy as a single person, as a married couple with no children and so forth. The sales and rental prices for properties were determined by the government and were fixed. Therefore, during this phase, Bulgaria had inadequate pricing and lacked a property market, leading to market imperfections such as insufficient supply, excessive demand and undervalued and very low properties.

The second phase in the revolution of the Bulgarian real estate markets occurred in the mid-1990s to early 2000s. During this period, the state relinquished the ownership rights of most properties that had been nationalized before to private owners, a factor that increased the supply of properties. However, this did not affect the rate of construction of new properties. Between 1996 and 1997, the prices per square meter rose dramatically because of the inflation that occurred during this period. Whereas this is the case, the government implemented a number of reforms that ended inflation leading to stabilization of real estate property prices. In addition, Bulgaria’s bid to join NATO (now a member since 2004) and the European Union (now a member since 2007) accelerated reforms in different sectors in this market, thus leading to an increase in demand, not only from local investors but also from external investors from North America and other European Union member states. In this case, this period saw an increase in the attractiveness of Bulgaria’s real estate markets.

The third phase which occurred between mid-2000s to present has witnessed the modernization of the Bulgarian real estate market. In the last ten years, the real estate in this country has experienced tremendous growth and appeared on the international markets for the first time, thus increasing external demand for its properties. In this regard, the market experienced a double-digit annual growth. This boom was only interrupted by the world economic crisis of 2007/08, which led to a drop in property prices. It is estimated that the property prices dropped by an average of between 30–40%. Whereas this is the case, since 2009, the real estate market in Bulgaria has experience a steady growth at an average of approximately 11.65%. Market research findings point to the fact that there is an increase in the number of investors in the real estate in Bulgaria. Most of these investors originate from Russia and the United Kingdom. Moreover, there are more reforms in the real estate sector that have helped stabilize the sector.

New era

The Bulgarian market has witnessed a steady growth since 2009 after it slowed because of the global economic crisis. Arguably, there has an increase in transactions in the real estate sector in this economy in the last few months amid the improving economy. In 2013, flats in Bulgaria had an average price of €442.12 (BGN 864.52) per square meter, which was a drop of just 1.21%. This represented the lowest drop in property prices in the last five years. On the contrary, when computed based on inflation, the actual prices of flats and other properties in this economy increased by 0.38%.

The quarterly averages of prices of properties in Bulgaria, especially for flats dropped by 0.15% between September and December 2013. When computed after factoring in the inflation rate during this period, the actual drop in prices of properties such as flats was -0.93%. This is an indication of stabilization of property prices and as such, the property market in this nation, which had witnessed a drop of close to 40% in property prices during the 2007/08 global financial crisis. Note that before the onset of the 2007/08 global financial crisis, property prices were as high as €725.17 (BGN 1,418) per square meter. Notably, between 2000 and 2008, the real estate market in Bulgaria witnessed a sharp rise in property prices, which finally stagnated in the last quarter of 2008. In 2009, the average prices of residential properties dropped by 26.31% from a year earlier while in 2010, the prices of residential properties dropped by 5.58%. A nearly similar scenario was witnessed in 2011 and 2012, which saw residential property prices fall by 6.16 and 1.4% respectively.

With respect to different cities and towns in Bulgaria, varied property prices were recorded. In this respect, the capital, Sofia, had average prices of €736.32 (BGN 1,439.79) per square meter for residential properties. In the same way, three out of Bulgaria’s 28 provinces, namely Tarnovo, Targovishte and Veliko recorded increase in house prices in 2013. On the contrary, provinces such as Sliven, Pazardzhik and Vratsa had a sharp decline in prices of houses in 2013.

Speaking from this perspective, it is vital to mention that the Bulgarian property market is on the road to complete recovery after its slowdown in 2008. This is as a result of the fact that in the last few years, most consumers in this country have enjoyed a stable income. In addition to this, there has been an upsurge in the cash savings of homebuyers, which when invested in the real estate market will boost this market. In this case, it is expected that in the next few coming months, the interest rates on savings will decline, thus forcing them to invest in real estate, which is a safe bet. This implies that as prices of properties in this sector rise, the profit margins of investors will increase considerably. In other words, Bulgaria is already positioned to become the most lucrative real estate market in Eastern Europe in the next few years.

Go Online and go Mobile! Your customers are already there..

Retail transformation…

There are various innovative technological breakthroughs in the 21 century that promote the growth of online retailing, and as such, define the future of the shopping center landscape. This section will highlight some of these innovative breakthroughs and continuities.

Mobile Point-of-Sale

To begin with, there are transformations in the way retails businesses run. Arguably, retail businesses are inclined towards providing more point-of-sale to customers through the provision of services that are convenient to customers. In this case, a customer does not need to go to a brick-and-mortar shop to make purchases. On the contrary, the online shopping through tablets, smartphones and PCs are becoming point-of-sales through which customers and retailers connect. With this in mind, customers can make their purchases from any place across the globe or from store itself. In other words, retailing is rapidly moving away from brick-and-mortar shops to online shopping via the internet.

New Retail Strategies

The floor-space has found totally new use in the retail sector. In this case, most retailers have in the recent past focused on setting up pop-up stores in factories, institutions of higher learning, beaches, trade fairs, or in factories, where they are open for a limited period of time such a day, a week, a month or a few months. Most of these retailers go to places where they believe there is a high demand for their products and services at a particular time, and in some cases, they create events that gives them the opportunity create their pop-up stores.


– The brick and mortar retail businesses are witnessing increase predatory competition with a decline in the floor-space yield.

– The Center Management continues to experience new challenges due to the decreasing foot traffic to different types of commercial real estate.

– The statistics point to the fact that the turnover of online shares is between approximately 4 per cent and 13 per cent, depending on the market or rather country in question. Therefore, it is necessary to examine how to make the 20 per cent of floor-space that is available productive.

– There are various reforms in the retail landscape due to the evolving consumer behavior – it is not the internet alone.

Shopping malls management needs to change

Intense predatory-like competition and crowding out currently define the retail sector in many European markets. In Western Europe, this competition is more pronounced as compared to Eastern Europe, which has also witnessed an increase in competition among key players in its retail markets. One of the factors that contribute to this increasing competition is the internationalization of the retail markets in the last two decades. For example the American Walmart had in the last ten year expanded their operations to more than 25 countries across the globe. A few years ago, retailers such as Hennes & Mauritz (H&M) had their presence in only ten countries. However, this retailer has since expanded its business operations to more than 80 countries across the globe. The same applies to The Body Shop, Marks & Spencer, Inditex Group, and Douglas among others. In this case, during the last few years, most retailers have become global players.

During this period of expansion and internalization, the global market places have witnessed increased construction activities that have resulted in emergence of numerous shopping centers in order to address the increased demand for retail space. Research points to the fact that these construction activities have led to the development of approximately 15,000 shopping malls and centers, retail parks and/or specialist malls, hypermarkets with retailers’ shopping galleries, and factory outlets across Europe. In most cases, these have comparable concepts and similar tenants.

What is it for customers?

Apart from increasing global retail competition, another factor that is making things difficult for shopping center is online retail boom and the changing behavior of retail consumers.

Evidence points to the fact that that there has been a considerable growth in B2C online retails activities in the USA, Europe and Asia. In this regard, online retail enjoys a sizeable market across the globe. For example, recent studies points to the fact that online retail activities will account for approximately 25 per cent of the total retail sales by 2020 in EU.

Business scholars, researchers, and analysts argue that the growth of online retail will only stagnate once its market share reaches 70 per cent. This implies that the mortar and brick retail business will become irrelevant in future.

But we still have time, right? I dont think so.