The Russian discount supermarket chain which expanded into Germany to battle Lidl and Aldi on their home turf has been forced to temporarily close its doors after just one week because it ran out of produce.
Massive crowds turned up last week when supermarket discounter Mere, which hopes to compete with German rivals Lidl and Aldi, opened up its first shop in Leipzig, a city in the eastern German state of Saxony.
The opening of the Leipzig Mere, which is owned by Russian investment group Torgservis, attracted such large crowds that the queues reportedly stretched to the end of the supermarket.
The shop nicknamed the “Russian Aldi” in local media has however already been forced to close its doors after running out of produce in scenes which would not have been out of place in the communist Soviet Union.
A Mere spokeswoman said: “We did not expect the massive crowds in the first days.”
The spokeswoman denied rumours of critics who said the closure is due to serious problems in their logistics as the cheap products reportedly have to come from far-flung countries in Eastern Europe.
The spokeswoman said: “The problems have nothing to do with foreign suppliers.”
According to the Mere management it was just a temporary problem of the shop having run out of foodstuff after a successful opening week and it announced the supermarket would reopen after two days.
According to trade management professor Gerd Hessert the problems are however likely to come back as long as the shop is still in its infancy.
Hessert said: “Just to shoulder the logistics costs, at least 100, but probably 200 to 300 branches are necessary.”
Over the next few years, Torgservis plans to open around 100 shops in the states of Mecklenburg-Vorpommern, Saxony, Saxony-Anhalt, Thuringia, Brandenburg and Berlin – which were all part of former communistic Eastern Germany.
According to local media, the opening received mixed views. Many praised the cheap prices, such as bottles of wine for 1 EUR (0.9 GBP) and frying pans for just 2.7 EUR (2.3 GBP) while others were disappointed with the range on offer.
One man who bought two bottles of wine said: “Yes, it is even cheaper than Aldi, but I actually wanted to buy frozen foods and they don’t have any in the store yet.”
Other customers complained that they could not even find butter at the Mere supermarket.
The bare-bones store layout – which even puts Aldi to shame – also received mixed reviews.
One woman said: “It looks like a warehouse, but with six people at home it is always nice to save a bit.”
A Mere spokesperson said that these problems will be solved soon and that more products will be made available.
Retail management professor Erik Maier said that he was sceptical about the chances of Mere surviving in the German market.
He said: “The supermarket trade in Germany has very low margins, and food prices are much lower than the EU average, so traders have to come up with something new.
“Store formats like this discount chain have failed in the German market in the past.”
Local media cited the previous examples of US giants Walmart and French supermarket chain Intermarche failing in Germany.
It is not known if Torgservis has plans to bring its Mere concept to the UK as well.
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Story By: Koen Berghuis, Sub-Editor: Joseph Golder, Agency: Central European News
