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Poor economic conditions forces Carrefour to close in Kazakhstan

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ALMATY, MAY 30 2017 (The Bulletin) — French hypermarket chain Carrefour will close its only store in Kazakhstan barely 15 months after opening, because the economy simply couldn’t support it.

The decision will be a personal embarrassment to Kazakh President Nursultan Nazarbayev who toured the hypermarket based in a shopping mall on the outskirts of Almaty when it opened in February 2016.

Seung Dae-Ryu, director of Carre- four in Kazakhstan, said the main reason for closing was the devaluation of the tenge and competition.

“The closure of the store does not mean that Majid Al Futtaim Hypermarkets Kazakhstan company is moving out of the country. The company will keep monitoring the economic situation in the republic and does not exclude the possibility of coming back into the market in future,” he was quoted by media as saying.

Carrefour is operated as a franchise in Kazakhstan by Dubai-based Majid Al Futtaim. It said in 2016 that it would open up to nine Carrefour hypermarkets in Kazakhstan.

Kazakhstan’s economy is recovering, slowly. A collapse in oil prices in 2014 and a recession in Russia stalled economic growth and halved the value of the tenge. Inflation has risen and people’s real incomes have fallen.

Over the past three years Western brands delayed plans to invest in Kazakhstan and the wider region, making the Carrefour entrance in 2016 a rarity. US coffee chain Starbucks opened its first store, as did the Swedish fashion house H+M, but there was little other cheer.

Mr Nazarbayev seized on the Carrefour opening as a PR opportunity, touring the shop, talking to staff and customers. He was upbeat.

It was a far more downbeat scene at the Grand Park Mall, when The Bulletin visited this week. Workers’ wearing the Carrefour blue uniform cut a despondent sight.

“Carrefour is closing and another supermarket is coming here. We will all be fired, I do not know if the new supermarket will give us a job,” one said, declining to be named. Unemployment is difficult to measure but it is clear that there has been a significant increase since 2014.

And customers were frustrated too. Natalya, 35, said that she regularly shopped at Carrefour as she enjoyed its wide choice of products.

“It is sad that it’s closing. It was very comfortable for me,” she said.

Turkish chain Ramstor dominates the supermarket sector in Kazakhstan. European firms have said Kazakhstan’s size and its relative isolation make operating there expensive.

For Mr Nazarbayev, the closure of the Carrefour hypermarket also makes for painful comparisons with Kazakhstan’s neighbours. Last year, Majid Al Futtaim said it would open its third Carrefour hypermarket in Georgia. It also operates one in both Armenia and Tajikistan.

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Copyright ©Central Asia & South Caucasus Bulletin — all rights reserved

(News report from Issue No. 331, published on June 5 2017)

 

Swedish fashion brand H&M opens first store in Kazakhstan

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ALMATY, MARCH 18 2017 (The Conway Bulletin) — Confounding the sluggish economic outlook, Swedish fashion retailer H&M opened its first shop in Kazakhstan in one of Almaty’s biggest shopping malls, Mega Alma-Ata.

Young Kazakh fashionistas had been waiting since July last year when H&M said it was going to open the store, to start shopping at one of the most recognisable global high street brands.

Azamat, a civil servant, was walking with H&M bags through the Mega mall.

“It is very well-known brand, I have heard of it. And here is the only shop that has opened in Kazakhstan, in Almaty, so I came here and I’m glad,” she said.

Gaukhar, a student, reflected on other high-profile openings over the past couple of years. “I saw many people came to the opening, it was a bit wild. Just like the first months of Starbucks here,” she said.

Kazakhstan has developed something of a reputation as shopping Mecca in Central Asia. Ten years ago there were few international brands in Kazakhstan, now a European shopper would feel at home browsing the shops of Almaty’s main streets or a shopping mall in Astana.

Kazakhstan’s economy has been in limp mode since mid-2014. The tenge has halved in value and people’s living standards have fallen, but Aigerim Karimova, marketing specialist at the Mega shopping mall said that H&M’s entry into the Kazakh market showed that the economy had turned a corner.

“The very fact that H&M has entered the Kazakh market is already a modest victory,” she told said.

And the head of H&M’s business programme in Central Asia, Milena Yershova said in July that the company will be aggressive.

“H&M opens large stores which offers customers choice,” she said.

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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 322, published on March 27 2017)

Spar opens new stores in Azerbaijan and Georgia

FEB. 15/16 2017 (The Conway Bulletin) — The Dutch convenience store chain Spar opened up more stores in Azerbaijan and Georgia, part of its drive to increase its global coverage. Spar said that it had opened three more stores in Baku at the end of last year, following the opening of its first store in the Azerbaijani capital in December 2015. In Georgia, Spar also opened another store, bringing to 21 its total for Georgia. Spar has expanded outside its central Europe heartland by both owning its stores directly and granting an independent retailer the rights to use its brand.

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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 317, published on Feb.17 2017)

H&M still on track to open store in Kazakh city

JAN. 31 2017 (The Conway Bulletin) — H&M, the Swedish fashion retailer, still intends to open its first store in Kazakhstan despite a fall in profit last year, its CEO Karl-Johan Persson said during its full-year results presentation. Mr Persson said that the rising value of the US dollar was one of the main drivers of the drop in profit. Last year H&M said that it would open its first store in Almaty. This is important because analysts have been worried that an economic downturn that has hit the region would hit companies’ plans.

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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 315, published on Feb. 3 2017)

Kalashnikov opens store in Georgian capital

TBILISI, JULY 11 2016 (The Conway Bulletin) — Russian arms manufacturer Kalashnikov has opened its first shop outside Russia in a Tbilisi shopping mall, selling guns and accessories from both the Kalashnikov range and the Baikal hunting range.

Kalashnikov, which is 51% owned by Rostec, a Russian defence sector state holding, had not sold civilian firearms to Georgia in a decade, the company said.

“In the next five years, we are looking to boost deliveries of civil arms to Georgia,” Kalashnikov’s marketing director, Vladimir Dmitriyev said in a press release.

Relations between Russia and Georgia have slowly improved since former President Mikheil Saakashvili lost power in 2013 and the new government moved towards reconciliation after a war in 2008 exacerbated tensions in the breakaway regions of South Ossetia and Abkhazia.

The new store said it will sell hunting and sports arms. The company is looking to brush off the old Soviet-era heritage and build a more modern, branded look. Last year, it opened 20 new shops across Russia and plans to enter Kazakhstan in 2017. Kalashnikov is one of Russia’s most recognisable brands.

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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 289, published on July 15 2016)

HM to open store in Kazakhstan

JULY 13 2016 (The Conway Bulletin) — Swedish fashion retailer H&M said it will open its first store in Kazakhstan in 2017, expanding its market into Central Asia. H&M follows other chains, such as French retailer Carrefour and food chain McDonald’s, which entered the Kazakh market in the past few months. Kazakh media said that the location for H&M’s new store is likely to be Almaty, Kazakhstan’s largest city.

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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 289, published on July 15 2016)

Auchan opens hypermarket in Tajik capital, its first in Central Asia

DUSHANBE, JUNE 21 2016 (The Conway Bulletin) — French hypermarket brand Auchan opened its first store in Tajikistan to local acclaim with crowds of residents thronging to the shop, which has been built on the side of a new shopping mall.

The hypermarket, one of 3,000 Auchan shops around the world and the first in Central Asia, was built by France’s Schiever Group.

The European Bank for Reconstruction and Development (EBRD) also invested 5m euros. According to the EBRD, Tajik people buy products from small shops and at high prices, and building a new hypermarket offers them a new alternative.

The opening of Auchan is also a boost for President Emomali Rakhmon who is under increasing pressure because of the country’s poor economic performance over the past few months.

The currency has dropped in value, inflation has risen and jobs have disappeared.

The four-storey Dushanbe Mall, home to the new Auchan store, has been built next to the headquarters of Tojiksodirotbank, one of the country’s biggest banks. This year, Tojiksodirotbank went into administration.

And Tajiks were excited at the prospect of shopping at the hypermarket. “Everything was good. Some products were cheaper than at street shops,” said Malika, 45.

Others were more skeptical.

“Many say that people do not have any money but look at how crowded this place has become,” said Sharif, a 38-years-old NGO worker.

“As time passes, though, less and less people will come.”

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 286, published on June 24 2016)

 

McDonald’s finally opens in Kazakh city

ALMATY, JUNE 10 2016 (The Conway Bulletin) — To much excitement, and a little controversy, McDonald’s opened its first restaurant in Almaty, Kazakhstan’s biggest city.

This is the second McDonald’s in Kazakhstan after a restaurant it opened in Astana in March.

At the opening on the site of an old cinema which heritage activists had campaigned to try and protect, Kairat Boranbayev, owner of the McDonald’s franchise in Kazakhstan and Belarus, said that the company aimed to build a total of 15 stores in Almaty and 10 in Astana.

The long-awaited opening of the McDonald’s restaurants has been one of the few positives for President Nursultan Nazarbayev this year, marked by a sharp drop in Kazakhstan’s economic outlook because of a recession in Russia and a fall in oil prices. Ordinary Kazakhs have seen inflation rise, jobs disappear and tenge savings wiped out.

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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 285, published on June 17 2016)

 

Kazakh businessman to sell MEGA

JUNE 1 2016 (The Conway Bulletin) — Nurlan Smagulov, one of Kazakhstan’s wealthiest businessmen, said he has found a buyer for his shopping malls in Astana and Aktobe, both under the MEGA brand. Last year, Mr Smagulov sold his MEGA shopping mall in Shymkent, in the south of the country. Mr Smagulov said proceeds from the sales will fund the growing costs for the completion of the MEGA Silk Way shopping centre in Astana.

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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 283, published on June 3 2016)

Kazakhstan’s stock lists Magnum’s bond

MAY 27 2016 (The Conway Bulletin) — KASE, Kazakhstan’s stock exchange, said it listed 10-year bonds issued by Magnum Cash & Carry, a chain of discount stores in Kazakhstan. The total issue amounted to 33b tenge (around $100m), one-third of the amount that Magnum plans to issue in the short term to finance its expansion in the country. In May 2014, Kenes Rakishev, son-in-law of Kazakhstan’s defence minister and closely-linked to the elite, bought a minority share in the company.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 283, published on June 3 2016)