Carrefour Says “Products Were Overpriced in Georgia”

The FINANCIAL — French hypermarket Carrefour sells products at the lowest prices in Tbilisi, followed by Nugeshi, Goodwill, Nikora and Smart.

The FINANCIAL — French hypermarket Carrefour sells products at the lowest prices in Tbilisi, followed by Nugeshi, Goodwill, Nikora and Smart.

The FINANCIAL studied and compared the costs of various products in different supermarkets of Georgia which showed that the prices of some products are 20% more in certain chains than in Carrefour, which was opened in September by UAE’s Rakeen Development.

Martini Bianco, one of the bestselling alcohol products in Georgia, cost over GEL 30 in Populi and Goodwill’s chains. Nugeshi was the first to offer this product for less, at GEL 23.50. However, at present Martini Bianco can be purchased for the lowest price at Carrefour. 

For the following shopping list of Martini Bianco, Jacobs Monarch, Marlboro Red, Sugar, Raffaello, Lay’s, Dirol, Matsoni, Nabeglavi, Snickers and Coca-Cola you will be charged GEL 54.4 at Nugeshi, GEL 59.80 at Smart, GEL 57.48 at Goodwill and just GEL 50 at Carrefour.

Gogi Shevardnadze, founder of Goodwill, the first hypermarket chain in Georgia, blamed Carrefour of ‘dumping’. He told Radio Commersant that the company’s policy is targeted on bankrupting its competitors and in accordance becoming a monopolist on the market.

Experts of The FINANCIAL predicted such a scenario just a few weeks ago. “Carrefour will be the main competitor for Goodwill. It will probably lead to decreased prices at Goodwill. There is no doubt that Goodwill will be damaged more than other supermarkets in Georgia”, Irakli Galdava, research fellow at ISET told The FINANCIAL on 15 September, two days after Carrefour entered the market.

Mikheil Charkviani, General Director of Goodwill, replied that neither Carrefour nor other hypermarkets or supermarkets in Georgia will hinder Goodwill’s increasing portfolio and number of customers. “Carrefour and Goodwill are working on different segments,” he said.

“In general, price is of course one of the most important factors for success, but not the only one, and many other factors can cause a given result. Nugeshi works on the lowest margin, which results in the fact that we offer products with the lowest prices,” Revaz Charkviani, Head of the Marketing Department at Nugeshi, told The FINANCIAL.

The Nugeshi network was opened in 2010 with the idea of offering the lowest prices.

Charkviani said that competitors’ pricing policies are part of their strategy. “As Nugeshi’s strategy is aimed at creating district markets we do not consider Carrefour our competitor. We both work on a diversified segment,” he added.
 
Nugeshi has four supermarkets in three districts of Tbilisi. In November the company will open a fifth supermarket on Kipshidze Street, Vake District. “Covering all the districts of Tbilisi was the main strategy of our company. Accordingly we have 70 small sized shops in every district. The parallel strategy aims to develop a market chain,” Charkviani added. 

Shevardnadze, Goodwill, said that while trying to destroy its competitors Carrefour is working at a loss. Sophie Azarashvili, Marketing and Database Manager at Carrefour Georgia, denied Shevadnadze’s allegation and said that the company is not running on loss. “We just tried to create a competitive environment and offer real prices that could have been offered by our competitors earlier”.

Carrefour started operating on the Georgian market on 13 September. Goodwill was founded in 2004. Smart Retail is a subsidiary of the Wissol Group, one of the largest companies in Georgia. Smart Retail was founded in 2010 and launched its first supermarket in Tbilisi on D. Aghmashenebeli Alley on 13th km in December of the same year. The Smart Supermarket chain has branches in Tbilisi and throughout the regions of Georgia.