A sense of crisis in south-eastern Europe

“In recent months the Bulgarian pet supplies trade has lost 10 per cent on average. Wholesalers have also suffered losses, but of approx. 5 per cent less.” Ivan Antonov, owner and managing di-rector of the Bulgarian retail and wholesale com-pany Miazoo, believes the Bulgarian eco-nomy is experiencing a serious crisis. This is currently impacting on the pet supplies trade too, in his opinion, because people’s disposable income is shrinking. His business colleague Irina Papasova, responsible with her husband Georgi Papazov for the fortunes of the wholesale firm Heiger (distribution of Vitakraft, Gimborn, Brit and Flatazor among other brands), also views the current situation of Bulgarian pet product businesses as anything but rosy. “The big mass merchandisers are ratcheting up the competition with a stream of new price campaigns,” she says, pointing to the fierce rivalry between Carrefour and Kaufland. Carrefour entered the Bulgarian market offering prices that considerably undercut those of existing suppliers. In response, Kaufland introduced so-called “white nights”, slashing the price of its entire range by half after 10 pm, recounts Irina Papasova. Casualties of the recession and the price war between the big chains include the pet shops. “The market share of the Bulgarian pet supplies trade is said to have dropped from 40 to 27 per cent in the last few months,” Irina Papasova says. At the same time, the share of the supermarkets and hypermarkets has reportedly risen from 60 to 73 per cent. One striking feature at present is that wet food for dogs and cats, the domain of the mass merchandisers, is experiencing a marked upswing at the expense of dry food. Even the accessories segment, which was already very weak in Bulgaria before the recession, is losing further ground, explains Irina Papasova. The situation doesn’t appear to be any better in Romania. At the end of last year, the government cut 9 000 civil service posts due to the financial crisis and slashed the salaries of remaining civil servants. Up to 100 000 jobs are also likely to go in the public sector. “The pet supplies trade has major problems at the moment because people have no money to spend on expensive products,” explains Cristi Pop, managing director of the pet store chain Animax and the wholesale company Pet Product srl. As in Bulgaria, the beneficiaries of the crisis are the big supermarket chains. And as in Bulgaria, there is little to suggest that the poor economic situation at…