Russian discount retailer Fix Price is preparing to enter the Serbian market, with plans to open several stores by the end of 2025, Kommersant reported on March 19.

This marks the company's second attempt to establish a presence in Europe, following its operations in Latvia, where it currently runs 44 stores.

The company has posted job openings on the recruitment website HH.ru, seeking personnel for its Serbian expansion. Positions include an HR specialist responsible for building a team to promote the brand locally, as well as roles for a chief accountant and senior legal counsel. An industry insider indicated that Fix Price aims to launch several physical outlets in Serbia during the latter half of 2025, alongside initiating online sales, Kommersant reports. The company Fix Price confirmed its intention to enter the Serbian market but declined to provide specific details.

As bne IntelliNews reported the Balkans are booming and the move is significant as it highlights that the Balkans is becoming an increasingly attractive market as incomes levels rise and a middle class emerges.

The Balkans has seen a raft of western European retailers move into the market in recent years, led by the likes of Lidl that have been rolling out hundreds of stores to tap the increasingly affluent population.

First generation retail success stories

Fix Price is one of the most successful of Russia’s second generation of retailers that flourished in the increasingly tough years of this decade, capitalising on the years of recession that follow the boom years of the noughties.

The first generation powerhouses such as the X5 Retail Group and regional supermarket giant Magnit grew rapidly at the end of the 1990s and the following decade as Russia emerged from the chaos of the Yeltsin-era and Russian President Vladimir Putin oversaw a decade of around 10% a year wage rises for public sector workers – about half the population.

Making money from retail in those years was easy and the race was on to simply capture as much market share as possible. Magnit, based in Krasnodar, took the early lead and surprised everyone as it ignored the affluent Moscow market and focused on rolling out a modern retail format in the regional cities. In the 1990s Russia was described as a country of two markets, “Moscow and everywhere else”, as most of the wealth was concentrated in the capital. Magnit’s success was due to catering to the lower income bracket in the regional cities that remained largely ignored but which was a significantly larger market in terms of the number of customers.

After Magnit’s IPO in April 2006, the company became a “tourist stock” with a large share of international equity investors with exposure to Russia buying its shares, as it was seen as largely apolitical and gave exposure to the rising living standards of the entire population.

The fairy tale came to an end after a boardroom bust-up amongst leading managers over strategy and the decision of Magnit’s founder, Sergey Galitsky, to sell his controlling stake to state-owned VTB Bank in a controversial deal that was called a "spit in the face" for minority investors, as it was structured in such a way as to avoid a mandatory buy-out of minority investors’ shares that gipped them out of millions of dollars.

From then X5 took over the baton as Russia’s most successful retail chain with its ownership of Pyaterochka, a discount convenience store chain with thousands of locations across Russia, Perekrestok, a mid-range supermarket chain offering a wider selection of products, and Karusel, a hypermarket format.

Fix Price disruptor

Fix Price is a countercyclical business: the worse the Russian economy does, the better Fix Price performs as shoppers are willing to make more effort to save money.

The post-boom years in Russia were tough. Real incomes stagnated or fell for years in the first half of the last decade. Russian shoppers became much more cost conscious. Fix Price’s appeal was no nonsense stores that offered bargain-basement prices on the household essentials well below the branded offerings in the established supermarkets.

As bne IntelliNews reported at the time in an interview with the company’s CEO Dmitry Kirsanov in 2020, the company boomed.

“People often come in for the basics like toilet paper or pasta, as we even offer these things for a very competitive price,” Anton Makhnev, the chain’s CFO, told bne IntelliNews in an interview. “But they stay for the bargains, the things they were not expecting to buy. And they buy them because they are both cheap and good quality. After a while people start to come into the stores just to see what is on offer in case there is another bargain they want to buy.”

Fix Price was so successful it started to eat into the incomes of the market leaders so much they rushed out their own rival brands to simply hang on to their falling market share. The biggest challenger was Chizhik (Sparrow) launched by X5 in a direct response to Fix Price’s growth.

Part of the success was that Fix Price was established in 2007 by Sergey Lomakin and Artem Khachatryan, who were co-founders of Kopeyka, another discount retail outlet and co-owners of Centrobuv, a footwear retailer specialising in affordable shoes with a vast network of stores, both of which the founders sold. Kopeika joined the X5 family of stores and was rolled into the Pyaterochka chain, removing the discount format from the market.

Having made some money and with nothing better to do, the founders decided to focus on Fix Price and build up the business for themselves in the now vacant discount niche.

“None of that affects us. We are in an entirely different niche. We are eating into the sales of the traditional retailers, but we don't compete with them directly,” says Makhnev. “It's the company’s major competitive advantage: the management team had already been running Kopeika for years and they had already made every possible mistake you can make in that business, so when they launched Fix Price they already knew exactly what they were doing.”

The difference between Fix Price and these chains targeting the lower end of the income bracket was to copy the “dollar stores” format that specifically offers extremely cheap products and doesn’t try to offer a complete range of every day goods to customers in a one-stop-shop format that the majority of supermarket follow. The concept is modelled on the successes of Dollar General and five Below in the US, Dollarama in Canada, b&m in the UK and Tchibo in Germany.

Another contributor to the store’s success was precisely the economic problems Russia was going through, coupled with the rise of e-commerce in these years. Chinese incomes had risen the point where blue collar Chinese factor workers became more expensive than Russian workers but the demand for mass produced consumer goods was rising thanks to e-commerce, leading to an explosion of light manufacturing investments – a stage that Russia skipped over in the early 1990s as the ruble was overvalued from the start thanks to its profligate oil and gas exports.

“The foreign-based suppliers used to make up a bigger share but following the devaluation of the ruble in the 2014 crisis it became much cheaper to use local suppliers and there are plenty of companies on the market willing to work,” says Makhnev.

The company grew by leaps and bounds despite operating in the period immediately after the Great Financial Crisis in 2008 and then the years of recession from 2013, when Russia’s petro-economic model ran out of steam and GDP growth fell to zero, despite fact that oil prices were still over $100. The start of the sanctions-era that began in 2014 after the annexation of Crimea only depressed Russia’s economy further.

But Fix Price’s income continued to grow throughout this period culminating in an IPO in London in March 2021 – a boom year for Russian IPOs – where the investor demand for its stock hit $2bn giving the company a market capitalisation of $8.3bn, the second biggest IPO ever by any retailer on the London Stock Exchange.

Most recently the retailer's revenue increased by 7.9% year on year in 2024, reaching RUB314.9bn, while net profit rose by 7% to RUB22.2bn, according to its IFRS accounts.

As it grew, Fixed Price has been looking for new markets, starting in the so-called near abroad. The company already operates stores in Kazakhstan, Belarus, Latvia, Uzbekistan, Georgia, Kyrgyzstan, Armenia, Mongolia and the United Arab Emirates. In Latvia, Fix Price operates 44 stores.

The discount retail sector in Serbia is highly competitive, dominated by established players such as Germany's Lidl, Slovenia's Mercator and the Netherlands' Delhaize.