Financial power of the Macedonian market
Case Details
Title: Financial Power of the Macedonian Retail Market
Food, Beverages & Tobacco Segment
Prepared by: Sergej Zafiroski, Author & Lead Analyst
– Insider ID (Research & Consulting Agency)
Analysis Period: 2018–2025 (with projections)
Scope: Market structure and consolidation trends, financial performance of retail chains, hard discount vs. classic supermarket concepts, consumer behavior, household spending patterns, and competitive dynamics within the food, beverages, and tobacco segment in North Macedonia.
Methodology Note:
The analysis combines official statistical data, financial statements of national retail chains, and proprietary research conducted by Insider ID, including the “Preferred Supermarket Chains 2025” study. Financial indicators, growth rates, and market shares are calculated using standardized methodologies to ensure consistency and comparability over time. Consumer spending trends are analyzed in relation to inflation and income dynamics to assess real purchasing behavior and structural shifts in the retail market.
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The Shift in Retail Power: Hard Discounters vs. Traditional Supermarkets
For the publication “Map of Retailers”, Insider ID consultants prepared an analysis of statistical data for the food, beverages and tobacco segment and the financial reports of supermarket chains.
The result of the “fight between concepts” i.e. hard discounts versus classic supermarket chains to attract consumers is clear. Hard discounts have recorded significant growth in the last 6 years in every aspect of their operations, from revenue, market share to recognition and preference among consumers. According to turnover, from chains that significantly lagged behind compared to classic chains, to absolute market leaders. For consumers, they have been the primary shopping location for several years, while classics are the secondary one for completing the consumer basket. Lidl’s entry will further redirect buyers to the hard discount segment, which will increase their market share. What is clear is that market consolidation and formal mergers of supermarkets are needed.
Local supermarket chains, operating in one or several cities and part of the classic supermarket concept, will have to act together as a formal entity if they wish to compete in the medium or long term (some of them even in the short term). It is noticeable that in the last few years, some of them have seen growth and development, but also significant challenges in their operations or are not operating at all. From the research “Preferred Supermarket Chains” in 2025, it is noticeable that the consumer is increasingly choosing the national chain (regardless of the concept) instead of the local one. In this, there is also a potential opportunity for partnership between national and local chains to increase their power.
All of the above does not indicate that classic supermarket chains have no place in the market. As can be seen from the analysis below, they will grow again in 2025 and generate approximately 468 million euros (national classic chains). Consumers will continue to want to have a larger selection of products and brands, personalized service, a different shopping atmosphere and, most importantly, they will still want to shop in the supermarket closest to their place of residence. Consequently, the potential exists in the market, but it can only be exploited through consolidation of the offer, optimization of processes and, of course, reduction of final product prices.
Total turnover in the segment and income of hard discounts and classic chains
The total turnover in the food, beverages and tobacco segment for 2024 was 2.08 billion euros, which represents an approximately 5% increase compared to the previous year. For the current year, it is expected to amount to 2.28 billion euros, or an increase of approximately 180 million euros (or 9%). Part of this growth will be caused by inflation, which is expected to be between 3.00% – 3.20% in 2025, but also the adjustment of markets to market circumstances, which will contribute to more stable growth. Of interest is the information that the growth of the entire segment in 2024/23 is 5%, but at the same time inflation is 3.50%, which indicates that real growth is significantly low.
The total turnover of national supermarket chains in 2024 amounted to approximately 1.1 billion euros and is expected to increase to 1.25 billion in 2025. The bulk of the turnover is generated by hard discounts or 676 million euros, compared to 451 million euros generated by classic supermarket chains. According to the projections, for 2025, turnover is expected to reach 786 million euros for discounts and 468 million euros for classic chains. Despite the oscillations, the total turnover and that of the supermarkets have continued to grow, with the exception of the crisis year 2020. What is interesting is that for 2024, Insider ID projected a growth in turnover of up to 2.2 billion euros and the result falls within the range but has a deviation of approximately 5%, which is primarily due to the reduction in inflation and measures to reduce its effects (since they were taken into account in the calculation).
The profit of national chains for the last year is 29 million euros, or 2.6% analyzed as a net profit margin. It is noticeable that despite the significant increase in revenue in the last 6 years of national chains, profits are decreasing. As a net profit margin, it was highest in 2020 with 4.2%, when 682 million euros of total turnover and a profit of 30 million euros were achieved, while the lowest in 2024 with 1.1 billion euros of turnover and 29 million euros of profit. This stagnation is potentially a consequence of the increasing share of hard discounters, which traditionally have lower profit margins compared to classic chains, but also the intensification of competition between chains, which is most often based on pricing policy.
It is notable that national chains, especially hard discounters, are growing at a significantly higher rate compared to general growth. In 2024, the last year for which data is available, the entire food, beverage and tobacco sector is 5%, compared to 17% for hard discounters and 8% for classic chains. The double-digit growth in turnover of national chains is driven primarily by the growth of hard discounters. There is still room for additional consumer acquisition by TT and local chains, which will allow the growth of hard discounters to be high (over 10%) in the next few years.
The shares in the total turnover of the various concepts further details the state of the domestic market. Several trends and information are of key importance, and provide insight into what can be expected in the coming period. National chains are continuously increasing their share in the total revenue of the segment from 39% in 2019 to 54% in 2024 (and projected 55% in 2025). Thus, the revenue and share of TT and local chains will decrease and be redirected towards systems with greater optimization. The second trend is that classic supermarket chains are recording a continuous decrease in their share in the total turnover of national chains, from 57% to 40% between 2019 and 2024. At the same time, hard discounts have increased their share in the turnover of national chains from 43% to 60% in the same period and realize 35% of the total turnover in the food, beverages and tobacco segment. If the same trends continue in 2025 and beyond, it can be expected that the position of hard discounts will be further established.
The consolidation of classic markets (which will also include local chains) is needed to maintain their share and reduce the decline that has been continuous throughout the analyzed period. Hard discounts are concentrated in three chains (KAM, Kipper and Stokomak), while classic ones disperse consumers in many different markets and similar concepts. Lidl will additionally accelerate the process of “transferring consumers” from TT and local chains to national ones, and will increase the share of discounts in the total turnover.
Used food, beverage and tobacco products
Considering that the last two years have seen a higher inflation rate, and in 2025 it is expected to be approximately 3.00%, one of the key pieces of information is how consumers have reacted to it. Have they maintained the same level of spending or is there a change? If inflation is higher than the growth of the funds used, consumers (despite the growth) optimize the budget, i.e. with the same funds they have purchased a smaller volume (number) of products.
In terms of absolute values, households between 2018 and 2024 (on average) spent between 2,500 and 2,973 euros per year on food, beverages and tobacco. It is noticeable that from 2021 to 2024 there is a stagnation in the budget that households used for this purpose. At the same time, with the exception of 2021 and 2022, the growth of private consumption per household is either equal to inflation or lower than it. The largest, real growth in consumption from the analyzed years was in 2019, when it amounted to 7.7%, compared to 0.4% inflation. Consequently, consumers on average spent the same amount of money in terms of total budget. In 2022, where the highest inflation was recorded, they also have a decrease in the funds used by -8.9% or 2,713 euros. What can be concluded is that consumers use the same budget over the years, but taking into account the growth of salaries in the period 2024/2025, it can be expected that in absolute terms in 2025/2026 the total budget will exceed the threshold of 3,000 euros.
From a business perspective, it indicates that markets and suppliers with higher prices are “fighting” for the same budget among consumers.
Households buy a smaller number of products, but with the same final value, which significantly intensifies competition between all those involved in retail. Behavior is not expected to change, which indicates that flexibility will be further “narrowed”, and the need for lower prices will be further emphasized, despite the impossibility of meeting them. “Financially logical” consumers (defined by Insider ID) who are people who prefer a location where they will get optimal prices for their budget, instead of “chasing” price promotions, will have an increasing share of the Macedonian market. Ultimately, this will be reflected in the structure of the market, where a further increase in the financial and market power of hard discounts is expected.
Markets are facing another highly competitive year, in which they will be forced to start making complex decisions. The formal association between local and national or between local markets themselves will be the basis for creating a future strategy in which they will have the opportunity to compete. The funds used by households, especially their stagnation, indicate that consumers will prefer hard discounts even more, with the desire to get the maximum number of products for the given budget.
