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The Retail Chain NTL Has Outgrown the Chains of Its Founders

The National Retail Chain (NTL) informed all its business partners about ten days ago that its long-time director Martin Evačić is retiring and that Tomislav Vrbanić has been appointed to his position. The new director at NTL comes from the position of regional director at Konzum, where he spent the last four years. Prior to that, he worked at Orbic, Radenska, and Zvijezda. Throughout his career, he has mostly held lower and middle management positions in sales, so his appointment to the top position at NTL marks his first assumption of a major management role in a large company.

NTL is one of the few companies fully owned by four retail chains (Bose, Bakmaza, Gavranović, and Trgovina Krk), and the only one that originated as an association and then evolved into a trading company with multiple co-owners and professional management.

Evačić took over the management of NTL in 2009 and has since elevated the company, which was established with the primary goal of ensuring the most favorable procurement conditions for merchants united in the NTL Group, to the level of a respectable purchasing association and retail chain. Products procured for its members through NTL, including private label products, are available at more than 1,150 sales points across Croatia, which is estimated to account for about 40 percent of the market share in domestic retail in the small format segment.

NTL’s own retail network has around 350 sales points, mostly in the northwestern part of Croatia, where it does not ‘compete’ with the chains of its founders and is mostly small format. This, one could say, outdated structure of sales points, which is certainly not the most favorable in an era when supermarkets and hypermarkets occupy the majority of market shares and continue to grow and expand through new retail parks, however, allowed NTL to increase its revenue by a significant 7.6 percent in the pandemic year of 2020, marked by months of shopping center closures, while total retail trade in that year experienced a decline of 4.9 percent. On the other hand, when total retail began to grow rapidly in the following two years, NTL faced a decline in revenue in 2021 and a lag in growth compared to competitors in 2022.

Smaller and medium-sized retailers in Croatia began to unite into joint supply chains at the beginning of this century. The first initiative came from Čakovec, specifically from Antun Janković, then the majority owner of the company Trgohit, who was captivated by the idea of the Hungarian purchasing association CBA to unite Eastern European retailers and initiated the establishment of the CBA association in Croatia. He gathered around him nine other already large regional retailers. It started excellently: Hungarian knowledge and experience were applied, the CBA company was established, and its own logistics-distribution center was set up. However, after a few years, a disruptor emerged, the Slovenian retail company Era, which decided to expand into Croatia through acquisitions, specifically targeting CBA members. After acquiring three CBA members, when Era also took over Trgohit, the association continued to disintegrate with some members transitioning to the Ultra group, a purchasing association established by another group of retailers shortly after CBA was formed.

Era was later acquired by the Slovenian Mercator, which then became owned by Agrokor and merged with Konzum. The paradox is that the attempt for smaller retailers to jointly gain stronger purchasing power to compete with Konzum was the main motivation for uniting in CBA. There were some negotiations about merging CBA and Ultra, but that did not happen. The Ultra group merged with Unigross from Pazin in 2005, one of the smaller purchasing associations that emerged in the market, thus creating Ultra gros, which strengthened while CBA weakened.

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