Major household electronics retailer Dixons may expand into Estonia

11.04.2012, 12:34

One of Europe’s largest retailers of household electronics, Dixons, has set its eyes on Estonia and plans to open its store here, writes Äripäev.

The company would set up in Estonia through the group’s Norwegian arm Elkjøp which operates different store brands in Norway, Finland, Denmark and Sweden.
By one scenario, the company would be using in Estonia its Finnish store brand Gigantti.

Ronny Blomseth, CEO of Elkjøp Nordic, admitted that the company had expansion plans, but did not yet say specifically that the group will open a store in Estonia.
“We have not yet made any decision about expanding into the Baltic countries. We are now looking at locations in different parts of Europe, but no decisions have yet been made,” said Blomseth.

Dixons that has 642 stores in UK and Ireland has another 285 stores in Scandinavia that use brands like El Giganten, Gigantti, Lefdal and Elkjop.

“If they have researched our market and understood that competition is low, I don’t see why they should not expand to Estonia,” said Tinno, adding that the Estonian market of household electronics was dominated by Euronics, a chain of household electronics stores that belongs to Antista AS.

Tinno said that there are still huge differences between the purchasing power of Estonians and Scandinavians, but it was all about the potential.

“If you look at the expected growth of the retail market and sales turnover, some studies show that we have significantly higher potential than Scandinavia,” said Tinno.

According to him, the company was mainly focusing on growth potential. “This is a long-term view, it’s not a five-year, but probably a ten-year projection,” said Tinno, adding that it was also still relatively cheap to build stores in Estonia in comparison with Scandinavia.

Speaking of potential properties, Tinno said that such a large store was likely to build its own big box somewhere in the suburbs, not in the centre.

Tinno added that often such companies were using franchisers to test the market and then could take over after a number of years.

Jaan Koppel, board member of Sandman Group, a wholesaler of household electronics that supplies the Euronics chain, said that he has heard about such plans, but these have so far been rumours.

“I think they have had this plan for the last ten years,” said Koppel, adding that in his opinion the company does not see the Estonian market large enough, having insufficient purchasing power.

Koppel said that he does not see that the Estonian retail market of household electronic lacked competition. “There are electronics stores virtually on every corner,” he added.