For decades, Jumbo has been a fixture of Greek retail: sprawling stores, vast product ranges, catchy jingles and profit margins that rival those of far more upscale brands. Now, analysts at Citi say that dominance may soon be tested.
In a recent analysis, Citi identifies the Dutch hard-discount chain Action as a credible and increasingly aggressive threat to Jumbo’s core markets in the Balkans. The bank says Action is exploring expansion into Bulgaria and Greece, countries where Jumbo generates the bulk of its sales and has built a commanding footprint.
Based on store-density comparisons, Citi estimates that Action could eventually open between 370 and 550 stores across markets where Jumbo already operates. Over time, that network could support annual sales of €1.5 billion to €2.2 billion—large enough to reshape pricing and growth dynamics in the region’s non-food retail sector.
A different kind of competition
Citi’s concern is not simply about another low-price player entering the field. Consumer ratings suggest that both Jumbo and Action are seen as affordable retailers, but the similarities largely end there. Action’s standardized stores, disciplined cost structure and emphasis on presentation and perceived quality contrast with Jumbo’s more cluttered, variety-first model.
The timing is also awkward for incumbent retailers. E-commerce continues to gain ground, and Citi points to the recent entry of Trendyol into Romania and Greece—backed by China’s Alibaba—as another source of competitive pressure in markets that were once relatively insulated.
The Action model
Founded in 1993 as a single store in Enkhuizen, the Netherlands, Action has grown into one of Europe’s most successful non-food retail chains, with more than 3,100 stores across the continent. Its appeal rests on scale and discipline: roughly two-thirds of its products are priced below €2, purchased in massive volumes and sold through a lean supply chain with minimal marketing spend.
Only about 35% of Action’s assortment is permanent. Each week, around 150 new products are introduced, encouraging frequent visits and reinforcing the chain’s core promise of ultra-low prices paired with constant novelty.
A margin story under scrutiny
Jumbo, founded in Athens in 1986 and led by entrepreneur Apostolos Vakakis, operates 80 stores across Greece, Cyprus, Bulgaria and Romania, along with an online business. With more than 6,600 employees, it remains one of the most profitable retailers internationally.
That profitability, Citi argues, is now a double-edged sword. The bank recently downgraded Jumbo to Neutral from Buy and cut its price target to €27 from €32, warning that margins “approaching luxury levels” leave the company more exposed when powerful discounters enter the market.
If Action follows through on its Balkan expansion, Citi says, the result would likely be sustained pressure on Jumbo’s pricing power and organic growth. For a retailer long accustomed to operating with little serious competition, the arrival of a disciplined, pan-European discounter could mark a turning point.
Source: ot.gr
