Bulgaria’s Fantastico Group has marked its 30-year anniversary with the opening of a splendid new flagship store in Pernik. ESM caught up with executive director Svetoslav Gavrilov. This article first appeared in ESM's November/December 2021 edition.
Fantastico by name, fantastic by nature – that’s the approach being taken by Bulgaria’s Fantastico Group, which marks its 30th anniversary this year. It recently reported its most successful year to date, with sales of €320.3 million in 2020 – a 5% year-on-year increase.
The group recently opened a flagship, 10,750-square-metre retail and entertainment complex in Pernik, near the Bulgarian capital, Sofia, which cost close to €13 million to develop and takes its supermarket portfolio to 44 outlets, in Sofia, Bankya, Elin Pelin, Pernik and Kyustendil. Its business portfolio also includes SkyCityMall, the MyChoice restaurant business, MegaXtreme Bowling, Joy Station Club, and fitness centre brand Fast & Fit.
“Each new project, despite the common vision of our sites, is unique,” Svetoslav Gavrilov, executive director, Fantastico Group, tells ESM. “On the one hand, we try to make the most of the opportunity provided by the specific location, and on the other hand, we always strive to implement the latest equipment that is currently available.”
The new Pernik retail outlet, which boasts 45,000 SKUs, has also enabled the business to expand its grocery offering. A new concept, MeatCorner, sees freshly cut meat prepared, while the dedicated ‘From the Small Farms to You’ section offers an array of local products. The store also boasts freshly prepared meals, a broad organic offering, fresh sushi, a bakery section, and a comprehensive wine selection. In addition, where possible, environmentally friendly lighting and refrigeration have been incorporated.
“The architecture of each of our sites is also unique, as we invest a lot to contribute to the improvement of the urban environment, making it more pleasant in which to live,” Gavrilov adds.
Believe In Bulgaria
While the Pernik store, in many ways, represents the latest chapter in the Fantastico story, the group’s origins date back to Bulgaria’s emergence from behind the Iron Curtain, at the start of the 1990s. The business was founded by its current president, Valeri Nikolov, as a small neighbourhood outlet, gradually acquiring and developing additional sites over the years and decades that followed.
“For these 30 years, Bulgaria has been going through a complex transition, from a centrally planned to a market economy,” says Gavrilov. “Fantastico has, similarly, gone through all these difficulties. There were years – with a shortage of goods, hyperinflation, high unemployment and a low standard of living – in which the main goal was for the company to survive.
“Over the years, several international chains with great financial opportunities and many years of experience have entered the country. Many could not withstand the competition, both Bulgarian and international. Our strategy now is to continue with our gradual expansion, opening sites both in Sofia and in cities near the capital, and gradually expanding in the perimeter.”
Reliance on its own resources has been the mantra at Fantastico Group since its foundation, and it’s an approach that has served the retailer well to date. While the rate of expansion has been slow, compared to that of many international retailers, its slow-and-steady approach has also enabled it to select and develop locations where it will have the most impact. As well as the Pernik store, the past year has also seen the opening of a store in Botevgrad, for example.
“In addition to new sites, Fantastico continuously invests in the modernisation of existing supermarkets, in order to be able to offer uniform consumer experience in all sites,” says Gavrilov. “One supermarket underwent a major refurbishment this year, while two are planned for next year.
“Growth is, of course, inconceivable if you only invest in facilities and equipment. A strategic priority for us is the development of the team. Only with true professionals at all levels, who are motivated and dedicated, can the development of the company be guaranteed.”
Career Prospects
Gavrilov has a particularly vested interest in Fantastico Group’s success. He started working at the family-owned retailer as a student back in 1999, working his way up through the company’s sales office before being appointed chief executive in February of last year – just before the pandemic struck.
“I started working at Fantastico as a student because the company offered flexible working hours, and I could combine study and work. I worked at the cash register and at night, as a shift manager. Gradually, over the course of 20 years, I went through positions such as product manager, deputy sales director, sales director, and general sales director, and now I am an executive director.
“Such development is no exception in the company. Our sales director, for example, was a long-term manager of our site in Oborishte Street, in Sofia, while the manager of our newest site, in Pernik, is only 27 years old and has been working for the company since he was 19. Everyone who wants to develop and works responsibly is welcome on our team.”
Battling The Pandemic
Of course, Fantastico Group hasn’t been immune to the challenges of the COVID-19 pandemic, with Bulgaria facing three ‘waves’ of the virus, in late 2020, in spring 2021, and today. The group saw a surge in sales for basic foodstuffs at the beginning of the pandemic, while its stores also experienced the same trend as many retailers across Europe: fewer visits, but increased sales.
“The priority was to ensure safe shopping and working conditions in supermarkets,” Gavrilov says of that period. “Despite the peaks in the consumption of some goods, we did not allow stocks to run out.”
The pandemic also forced the group to think on its feet and incorporate an online/e-commerce solution where one did not previously exist. It started a partnership with Foodpanda, now known as Glovo, and extended this to incorporate a partnership with local platform DelivMe.
“We are aware that online commerce in our sector has great development potential,” says Gavrilov. “That’s why, in 2015, we started a joint project with a partner who had such an idea and software know-how, but needed stable support. We were part of this project until the sales reached levels that required it to become an independent activity.
“With the onset of the pandemic, we urgently had to offer our customers the option of online shopping again, and in less than a month, we started working with Glovo – or Foodpanda, as they were known at that time. We thus responded to the needs of clients as quickly as possible. The service was later supplemented with our partners DelivMe.”
While the share of online sales remains low, the growth seen over the past year indicates that it may become a popular channel in the years to come, although Gavrilov is non-committal on the group’s willingness to develop its own online platform.
“We have an idea to develop our own online site, but we know from our experience so far that offering a truly quality service in this area requires not only serious investment, but also substantial human capital,” he says.
Market Positioning
While Kaufland and Lidl lead the modern retail sector in Bulgaria – and are positioned more towards the value end of the spectrum – Gavrilov is confident that Fantastico’s positioning enables it to capture both value-hungry shoppers and those seeking higher-quality items.
“Our policy has always been to offer the maximum choice of quality products to the customer, in terms of both brands and price levels,” he says. “The choice then remains with the customer.
“The fact that we also offer products in the higher price segment does not mean that we neglect the more common products, or that we do not monitor the price levels on the market. We strive to be price competitive with all market players, especially when it comes to essential goods.”
Local sourcing also plays a key role in the brand’s offering.
“Bulgaria is a major producer of agricultural products and has a well-developed production of food and beverages,” Gavrilov says. “The ratio of Bulgarian to imported food varies in the different commodity groups. With some goods, such as fruit and vegetables, there is pronounced seasonality.”
Gavrilov also adds that the retailer does not agree with the stance taken by some politicians relating to enforced local sourcing.
“Our task is to offer maximum choice to customers. We do not impose some goods at the expense of others,” says Gavrilov. “We believe in the principles of the free market, and we have always opposed populist attempts to impose certain goods administratively.”
Building For The Future
As it looks to the new year, Gavrilov says that the group is “working on several new projects, like we always do,” with Fantastico planning to build two new supermarkets, undertake two renovation projects, and develop a new refrigerated warehouse, which will significantly bolster its logistics capacity.
In other words, should we expect any major deviation from the slow-and-steady development routine that has served the business well over the past three decades?
“There’s no such thing as routine in our business,” Gavrilov adds. “It’s never boring.”
© 2021 European Supermarket Magazine. Article by Stephen Wynne-Jones. For more Retail news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.
