Mercator may return to Bosnia & Herzegovina | Progresiv
Mercator brand will possibly return to Bosnia & Herzegovina (BiH) following a meeting between the country’s council of ministers and Agrokor’s trustee, Ante Ramljak, in May 25th. The government-assigned trustee considers this a necessary move if the jobs of Agrokor’s employees to be protected and dues to suppliers to be paid. 
Mercator must cover overdue payments to its own suppliers, and to take over the operation of Konzum BiH will add the pressure on its financial obligation. Also, Mercator’s revenue situation needs improvement since it reported a 4% drop in 2016, a 6.7% decline in Q1 2017, and the retailer projects a decline of 4% in 2017. This is whilst Konzum BiH reports a 12% drop in revenue and a loss of over 20 million euros for the 2016FY.
Agrokor (Konzum) held the top spot in the BiH’s retail market in 2015, but lost it when domestic retailer Bingo maintained its expansionary trajectory whilst Konzum stagnated. Bingo’s 2015 acquisition of Slovenian retailer Tuš and France’s Intermarche in BiH boosted its market share. This, alongside dynamic store expansions and store refurbishments, Bingo rewarded itself with double-digit sales growth in 2015 and 2016. Konzum BiH already has a lead in geographic and omnichannel presence with over 250 stores. So, if Mercator is to return to BiH it will invest in its appeal to shoppers rather in expansion.
There are some positives for Mercator to hang onto if Konzum BiH were to be handed back. Firstly, supplier trust over future invoices is likely to be regained due to Mercator’s long-standing and stable operation in BiH before the Agrokor acquisition. Secondly, Mercator sold off its sportswear, apparel, and health and beauty businesses in 2016. This can allow Mercator to concentrate its investment and efforts in BiH on its grocery retail business. Thirdly, Mercator’s commercial strategy in Slovenia and Serbia will likely be applied in BiH. Mercator will look to broaden shopper mission with store refurbishments that will involve expansion of fresh produce offer, development of a prepared food category, use of shop-in-shops to drive footfall, and various other features. (www.igd.com)
