Modern trade as part of the contemporary market in Bulgaria

The Bulgarian Institute for Market Economics published the results of its research on “Visible and invisible effects of the entering of modern trade in Bulgaria: facts vs. myths”. The goal is to refute some widespread myths about modern trade and explain how it really affects the market.

Let’s start with an elaboration on what “modern trade” means. Although there is no definition, which is universally accepted by everyone, “modern trade” generally implies the retail selling of goods in malls, supermarkets and hypermarkets. So in a sense, the implication is about big shopping venues, which offer a large assortment of goods and operate on the principle of self-service. That is the difference with standard trade, where the shopping is conducted in smaller stores, which offer a smaller assortment of goods and the client can’t take the item he likes by himself – instead, it has to be done by the seller behind the counter.

One of the myths is that the entering of large chain stores puts the local producers at a disadvantage, because those stores offer mainly imported goods. According to the research though, 60-70% of the goods come from Bulgarian suppliers. The chain stores build and maintain relationships with the local producers and suppliers and help them to incorporate European quality standards, which increases their competitiveness.

The large chain stores provide investments as well. Until the beginning of 2016, the foreign direct investments in the retail sector are 2.6 billion leva or 5.8% of the total compiled FDIs up to that point.

The research also shows that statements about mass bankruptcies of small stores and losses of jobs because of the emergence of large chain stores are untrue. For the period 2005-2015 the people employed in the retail sector increase by 12%.

Modern chain stores offer a large assortment of goods to their clients – something impossible for smaller stores. The methods of certification and control, as well as the high requirements towards the suppliers, assure the quality of the offered goods.

It is worth mentioning that part of the chain stores in the country provide courses, participate in vocational training programs, as well as in different campaigns for the protection of the environment, preservation of the cultural heritage, charities for various causes etc.

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