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Montenegro’s retail landscape: Expansion, profitability and socioeconomic influence

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The retail landscape in Montenegro experienced robust growth last year, with major players like Voli, HD Laković, Idea, Domaća trgovina, Franca and Mega promet collectively generating nearly one billion euros in sales revenue, marking a 15% increase from the previous year. While this growth is notable, it signals a slight slowdown compared to the 25% surge observed in 2022.

Voli, a longstanding market leader, demonstrated remarkable consistency in growth, maintaining a dominant position with a 35% share of sales revenue throughout the period under review. HD Laković and Idea-CG also displayed strong performances, with Idea-CG notably achieving significant growth through strategic acquisitions, such as the takeover of Franca markets, expanding its market share to over 18.3% in 2023.

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Megapromet, though a smaller player, exhibited impressive growth, particularly in Budva, the wealthiest municipality in Montenegro. The company’s aggressive expansion strategies, including the development of a new shopping center, underscore its commitment to market share expansion and infrastructure investment.

The record-high net profits of these retail chains in 2023 reflect the industry’s profitability. Voli led in profit generation, followed closely by HD Laković. Idea-CG reversed its negative business trajectory, posting a substantial profit in 2023, while Domaća trgovina saw a significant profit increase of 140%.

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Return on Equity (ROE) indicators for these companies remained strong, reflecting their efficient capital utilization. Despite variations in average salaries across companies, the sector’s overall average aligned closely with the national average net wage. Companies like Domaća trgovina and Voli offered above-average wages, highlighting their commitment to employee welfare.

The retail sector’s substantial contributions to Montenegro’s economy through taxes and employee-related contributions underline its significance. Voli emerged as the top contributor, followed by HD Laković, reflecting their substantial fiscal contributions to the state.

Overall, the retail sector in Montenegro continues to thrive, driven by strategic expansions, strong financial performance, and contributions to both the economy and workforce welfare.

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