The first Decathlon, the Blockbuster Mall’ opening, the Brusnichka’ bankruptcy and others: 10 main events in the retail and development of Ukraine in 2019

The Ukrainian Retail Association presents its own version of the events that have most strongly influenced domestic retail trade over the past 12 months.

The outgoing year will be remembered for the appearance in Ukraine of long-awaited brands and long-promised mega-malls opening. Old SECs’ re-conception and a shift in emphasis in the design of new facilities towards maximizing the consumer experience to attract visitors was also 2019 characteristic feature. Similar trends are noted in the restaurant market, where food delivery services and food-venues new conceptual formats are actively developing. This year’s events will determine trends in 2020 and beyond.

The Ukrainian Retail Association decided to recall 2019 most significant events.

 Decathlon entry the Ukrainian market

Another brand’ emergence of the Mullet Family Association – Decathlon French chain of sports goods and equipment stores – was an important event for the Ukrainian market this year. The first outlet grand’ opening of the world’s largest sports goods manufacturer in Kiev took place on March 23, 2019. Shop with ​​2500 sq. m in Retail Park Petrovka is average by the chain standards opening retail outlets with square up ​​500 sq. to 12,000 sq. But this is enough to present 26 the company’s own brands for 70 sport kinds.

Eight months later, the French retailer opened second store with 3,000 sq. m, which made it the largest company’ object in the country. Squash, golf, snowboarding, hockey and field hockey were added among the new sports, goods for which were not previously present in the Decathlon assortment in Ukraine. In the spring it announced the supply of equipment for paddle and beach tennis.

The Mullet Family Association comprehensively develops its retail chains in Ukraine – Auchan, Leroy Merlin and Decathlon. Therefore, the new Decathlon occupied part of the former Auchan squares in the Lavina Mall. In the next two years, Decathlon plans to develop in Kiev, and then go into large cities – Lvov, Odessa, and Dnepr.

IKEA will open an online-store in Ukraine

The Swedish company IKEA, Europe’s largest retailer of furniture and household goods, once again postponed the date and updated its plan for entering the Ukrainian market, deciding to launch an online-store before the physical points were opened. The expected start date of the portal is spring 2020.

At the same time, the company confirms its intention to open a physical store in Kiev. In the summer, IKEA even announced the recruitment of employees to work in the first urban-format store in Kiev (about 100 employees), intending to launch it at the 2019 end.

At the same time, the company confirms its intention to open a physical store in Kiev. In the summer, IKEA even announced the recruitment of employees to work in the first urban-format store in Kiev (about 100 employees), intending to launch it at the 2019 end.

However, it is possible that these plans will be adjusted. Recall that the history of the entry this chain in Ukraine lasts more than 14 years. Back in September 2018, IKEA officially announced the opening of the first store in Ukraine in city-store format in 2019 – at SEC Ocean Mall in Kiev. However, the retailer later declared that due to the delay in the SEC construction (which is generally typical for Ukrainian developers, including Vagif Aliyev’s Mandarin Plaza), the company is considering alternative ways to start a business in Ukraine. As a result, the  Swedish group’ store in Ukraine did not open in 2019 either.

Brusnichka’ bankruptcy, Monton leaving, Polyany and WOG Cafe closing

The richest Ukrainian Rinat Akhmetov left grocery retail. It is became known at the summer end about Brusnichka stores’ mass closure. In November the bankruptcy case of the grocery chain was officially started in the Dnipropetrovsk Region’ Commercial Court. The chain at the year beginning consisted of more than 100 stores, of which dozens of outlets managed to close. Total debts to banks, suppliers and employees amount to a record UAH 1.1 billion. Moreover,  Brusnichka assets are estimated at only UAH 223 million.

It was also necessary to curtail own business at the Polyana wine chain – the last point closed in early summer. The company managed 35 stores in Kiev and some regional centers at the development’ peak in 2013, but in recent years it has lost ground in the market and closed its facilities.

Also at the summer’ beginning Kiev WOG cafes were closed, operating separately from the gas-station. Plans to open 200 these points were not destined to come true. The company decided not to focus on city cafes, but on work in infrastructure projects – in 16 intercity trains and three airports – Kiev Borispol and Zhulyany, as well as Lvov named Danila Galitsky.

It is out of luck and the fashion-brand Monton, which could not stand the competition with more powerful foreign players who entered Ukraine in 2018. This is primarily H&M, DeFacto and Koton.

Large formats in FMCG

Retailers continue to open large-format facilities despite the growing popularity of the “convenience-store” format. So, this autumn, the largest Silpo opened in the capital’s SEC Blockbuster Mall. Its total square is almost 9500 sq. m. The Academy of Taste Silpo will work on the market’ second floor, where it is planned to conduct lectures, tastings and master classes.

In December, the SC ROST’ opening with the eponymous supermarket with 10,000 sq. m took place in Kharkov, which became the record-breaking opening of the year in food retail in Ukraine.

After an eight-year break, the German concern Metro AG Ukrainian division again began to open retail outlets. True, this time the chain opened a new store in Chernigov under the brand “Bery-Vezi” with 1560 sq. m total square, and trading – 1155 sq. m. This is strikingly different from usual Metro hypermarkets with 20,000 sq. m and more. The current Metro strategy in all countries is focused on the b2b segment, and not on the sale of goods to end users. Accordingly, the new store is primarily aimed at customers from HoReCa and distributors.

Significant shopping and entertainment centers openings: Blockbuster, River Mall and Spartak

This year, finally, the Blockbuster Mall long-awaited opening  was held, where the largest Silpo was the first to start work on November 20. Shopping gallery’ remaining stores will open as soon as it will be ready. Recall that earlier the Owner of the object Vagif Aliyev announced the SEC opening on May 31, 2019. The first stage square of the facility amounted to 190,000 sq. m In total, the SEC square would exceed 450,000 sq. m.

In August, first visitors were also received by the metropolitan SEC River Mall. This is an object with 64,000 sq. rental square, which made it the largest retail facility in the capital on the Dnepr Left Bank. Silpo is again among anchor tenants, as well as the 10-screen Planet Kino cinema, the third Ukrainian H&M store, ZARA and others.

But significant discoveries were held not only in the capital. In spring, specialized shopping and entertainment center Spartak opened in Lviv. The total square of ​​the two-story shopping center is 35,000 sq. m., rental – 23,000 sq. m. Silpo in the style “Jazz”, a 7-screen Multiplex cinema with a children’s zone and Sportlife with an Olympic-standard pool became anchor tenants.

Purchase – sale of large shopping centers in Kiev and regions

The little-known company Soltex Capital acquired the Kiev SEC Respublika for more than UAH 777 million. It is preparing to resume work on the completion of one of the largest SECs in the capital. According to media reports, work can be completed in 18 months. Respublika is one of the largest SEC in Kiev with square  ​​about 300,000 sq. m, the construction of which began in 2012 and was frozen in 2015. Claim rights for loans, where SEC Respublika acted as collateral, were sold for several years.

The most active investor in commercial real estate continues to be Dragon Capital. It in August accepted the deal to purchase Zaporozhe SEC City Mall and Krivorozhsky Solnechnaya Galereya from Arricano Real Estate. In April, the investment company announced the purchase of SEC Smart Plaza Obolon in Kiev with 15, 000 sq. total square, of which 10,000 sq. – rental. In March, the agreement was closed on the purchase of the capital’s SEC Aladdin with ​​16,466 sq. square from the company Meyer Bergman.

Dragon Capital is also rapidly expanding its warehouse real estate portfolio: in December, it received permission from the Antimonopoly Committee of Ukraine for the purchase of the Class A warehouse complex with ​​12,000 sq. square near Kharkov through participation in the authorized capital of the company UC Real Estate. And the year the investment company began with the acquiring of Arctic logistics complex from Oschadbank with ​​21,500 sq. square near Kiev.

First thousandths: ATB opened the 1000th discounter, EVA came close to the frontier

On March 4, 2019, the ATB discounters’ chain opened its 1000th anniversary store in the village Kryzhanovka, Odessa region. Within a week, ATB’s retail chain totaled 1,002 retail outlets located in 256 settlements in 22 regions of Ukraine.

Priority regions of development are still the Western and Southern regions of Ukraine.

Next year another retailer – the largest EVA drogerie-stores’ chain in Ukraine – is preparing to cross the coveted frontier of thousand outlets. Now EVA already has 943 outlets in the country, and by the year end there should be 970. The task for the next year is at least 180 more stores in Ukraine. It is for comparison: last year EVA opened 178 stores, in 2017 – 168.

Food to home: the delivery services’ rapid development

On February 6, 2019, Uber officially announced the launch in the Ukrainian capital of its Uber Eats food ordering and delivery application. Later, the service became available in Lvov, and in December Uber Eats began to work in Odessa.

The Spanish Glovo became the first of the international delivery services to Ukraine – in October 2018. Over the year, the company managed to gain a foothold in 12 cities of Ukraine, including the capital. Recently, Zhitomir joined its, becoming the 13th region of coverage.

The third international player, Menu Group, represented in Armenia, Georgia and Belarus, launched a delivery service in Kiev this autumn. The international operator in the summer acquired one of first domestic services for the delivery of prepared food from restaurants: eda.ua, in order to accelerate entry the Ukrainian market.  Eda.ua delivered food from more than 1,500 restaurants in 29 cities of Ukraine. But the international operator is creating its own service, which is planned to be launched in Kharkov, Dnepr, Odessa and Lvov within a year.

On November 11, 2019, new express delivery service Raketa began to work in Kiev. The company from the Dnepr intends to compete with eminent players by organizing a chain of its own kitchens, the so-called dark kitchen, as well as by providing telephone and online-support to quickly resolve any issues. The first dark kitchen is already in test mode in the Bessarabian market. In 2020, the service intends to entry another 15 cities, after which coverage of all Ukrainian cities with a population of more than 200,000 will begin.

Uber also decided to enter, the example, another Bolt taxi ordering service, which announced plans to launch a food delivery service. This year, the service will be launched in a number of countries, and it will appear in Ukraine in 2020.

The first food-hall in Kiev and new catering formats

This year also a number of catering establishments’ new formats appeared. In May, in Kiev, near the River Station, the BUHTA Food Station opened, which became the largest open air food-court in the capital. The Founder of the project is the author of the Ulichnaya eda festival Roman Tugashev. The food-court square amounted 1,500 sq., which housed 17 sea-containers with street food, bars and a lounge-zone.

In the autumn, KyivFoodMarket began its work in the capital – an unusual object for the capital – the food-hall on the building of the former Arsenal factory territory. It housed two and a half dozen different institutions on almost 2000 sq. square. The concept of the institution is similar to the Odessa City food market, which was opened by restaurateur Alex Cooper.

Old SECs new life

In 2019, several Ukrainian SEC announced plans to carry out large-scale renovation and concept’ change, as well as to update the tenants’ composition. The Kyiv SEC Dream Town will noticeably change. There will be new tenants, world leaders and full rebranding as promised by one of SEC leaders – Garik Korogodsky. The Dream Town administration is confident that improving the  tenants’ pool will increase the regular customers’ loyalty, and in the long run it will ensure SEC stable competitive position.

In early December, the capital’s Outlet Caravan Shopping Center opened after the update. It has been partially closed since this year’ summer. The management company took this step to increase the facility’ attendance and to improve its business performance. In just six months, DCH Infrastructure & Real Estate has updated the interior space, changed the sections’ configuration, modernized the building’ exterior, and landscaped the surrounding territory. But, most importantly, what it is happened – the concept has changed: Caravan switched to working with stores in the outlet-format. Outlet Caravan square is about 58,000 sq., including 15,000 sq. shopping galleries, a business center, entertainment and food-zones after the shopping galleries and office space reconstruction.

The capital market-mall Darynok also carries out large-scale re-conception and changes the anchor tenant in order to keep up with current market requirements. First of all, in 2020 it will update the food-court zone, the total square of ​​which will be 1477 sq. m. Secondly, the new coworking Platforma Office Club opening for 800 seats from Coworking Platforma will take place. The first step in implementing the market-mall’ new strategy is to change the food anchor. Silpo, the leader of the Ukrainian retail market, became such food anchor. New supermarket total square ​​ will be 3000 sq. m, of which 1650 sq. m – ​​the trading floor’ square.

However, the re-concept also affected regions. So, on December 14, SEC NEO PLAZA was opened after reconstruction in the Dnepr. Its total square is ​​24 505 sq. m. Anchor tenants included leading national and multinational retail chains, which presented its retail outlets in a new concept: VARUS supermarket, EVA Beauty brand store, Japanese design brand MINISO and others.

Kharkov SEC French Boulevard in October opened two new floors: Food-Hall with ​​1263 sq. m and the children’s gallery “Kid’s Boulevard” with ​​1208 sq. m. The shopping and entertainment center’ square increased by almost 2500 sq. m after new locations’ opening

The Lvov SEC Roksolana also changed the anchor tenant – the Silpo grocery supermarket with an original design and the Antoshka children’s goods chain store in an updated format began to operate in the complex.

The Vinnytsia SEC Sky Park is also changing. The facility’ managing company   Dragon Capital Property Management opened new Silpo supermarket in a new format in the shopping center, and also attracted a number of new operators. The same group is updating the capital SEC Aladdin, attracting Ukrainian and international retailers with an original concept and unique offers.

Read more –

H & M, IKEA, Decathlon, Rive Gauche and others: 10 main events in the retail and development of Ukraine for the 2018th