Arrival of a major brand stirs buzz and fuss around, but Depo in Lithuania has taken a different approach. If not for a couple of modest-size articles in local press, the residents of Klaipeda, where the Latvian hardware giant opened its first store, few would have noticed the coming.
“Indeed, the whole opening they had was pretty weird, with no buzz and eye-catchy headlines. I am not sure whether it works in favor of Depo”, Kazys Skutulas, director general of JSC “Konsole”, a Klaipeda-based construction company, said.
Unlike the rivals, Ermitazas, Moki-Vezi and Senukai, the opening of which has been a talked-about thing for weeks in Klaipeda, Depo chose quiet self-introduction.
With the 27 million euro store in the Lithuanian seaport opened, Depo eyes expansion in the country with the other malls slated for the new year in capital Vilnius and Kaunas, the second-largest Lithuanian city, as well as Panevezys, a city in northern Lithuania. The hardware chain has said it wants also two stores in Vilnius. In Latvia, Depo runs nine stores across the country.
The store in Klaipeda is situated in the intersection of Silutes Road and Dubysos Street, which is in proximity of the already defunct Bauhof, an Estonian building materials and household goods store.
The Klaipeda store employs 180 floor workers and takes up five hectares with the indoor space spanning 25 thousand square meters. There is a 540-slot parking lot at the store. The contractor had to drain a large swamp before the start of the construction.
To many, the arrival of Depo is out of the blue as Klaipeda’s building materials and household goods market is thought to be pretty saturated.
In the wake of the Bauhof demise, the Latvian company seems to be resolved to defy the odds.
“Depo entered a market where it won’t be easy to operate, just because the competition is big and there are no many construction sites around”, Mindaugas Sinkevicius, stakeholder at Moki-Vezi, said.
The prices in Lithuania, he says, are up to 30% on the lower end than those in Latvia and Estonia, which just makes it harder for a chain to make inroads in the Lithuanian market.
“The fact is that Northern chains struggle to make it here. Bauhof had to pull out from Lithuania due to the losses it was accumulating here”, Sinkevicius underlined.
The Estonian chain ran five stores at its peak in Lithuania, but went abruptly bankrupt in 2014, with the losses said to be around 20 million euros.
Genovaite Zicke said the store was building up its success around low prices.
“We will offer them on daily basis. We will try to surprise our customer and heed their wishes”, the store manager said. She, however, did not elaborate on the sale numbers during the first week since the opening.
Meanwhile, many potential Depo customers have seemingly assumed waiting position to see how the Depo arrival unravels.
“No, I haven’t yet checked out the store. And I cannot say it has created a buzz in the local construction sector. The majority of builders rely on the existing market players, however, the bottom rule is that one seeks a best ratio of the price and quality. If Depo can work out such an image, then it stands a chance. The bottom line is the more suppliers are out there, the better it is for the buyers”, Viktoras Jasinskas, founder and director general of “Statpala”, a construction company operating the town of Palanga, said.
Kazys Skutulas of “Konsole” admitted he did not yet stopped by the store and expressed his doubts about its prospects.
“As many around, I have long-term suppliers and I am not even sure what would make me switch from them to Depo. Perhaps an excellent proportion of the price and quality, as well as assurances that any order can be fulfilled very quickly”, the businessman said.
He doesn’t plan to visit Depo anytime soon.
“Simply speaking, there is no need for that. If I start hearing something extraordinary about them, it will be the driving force to get me into their store”, Skutulas said.
Meanwhile, the majority of online commentators sounded pretty sardonic about the Latvians’ striving to make it in Klaipeda.
Some of the most interesting zingers refer to the significant shrunk of the population in the city.
“The businessmen must be snubbing the reality of local demographics. If they defy the official stats, they need to drive around, especially in the vicinities and see with their own eyes how many people are left there”, says a commentator by the name of “Emigrant.”
Another online poster ponders that Depo can do pretty well only in capital Vilnius, where the population has been swelling recently.
“However, elsewhere they do not stand a chance due to the limited population, local residents’ tepid purchasing power and the severe competition”, says Victor.
Yet some noted in the posts that the prices at Depo were lower than in the similar chains around.
“For some of the goods, down to 30%”, writes Ina, who admitted she had not yet shopped at Depo.
Yet the others taunt her for being “short-sighted.”
“You say the lamps and chandeliers at Klaipeda Depo are 30% cheaper than in similar stores in Estonia? The huge difference in the purchasing power between the average Lithuanian and Estonian must have slipped through your eyes”, a commentator introducing himself as “Funny” says. (BNN/Business World Magazine)
