Business
Hungary dreams up nightmare for the likes of Lidl and Spar
The new legislation stipulates that in the case of any commercial real estate sprawling on a gross area of over 400 square metres, not only building or reconstruction but any other change that currently do not require building permit, such as renovation will require the approval of the relevant authority, local business daily Világgazdaság reported on Tuesday.
Due to the so-called "plaza ban", it is already much more difficult to open new stores than before the regulation was implemented in 2012. Subsequently, over the last few years if a business wanted to grow it was easier to buy another store and refurbish it to match its own profile.
These few examples also reaffirm that while the plaza ban announced in December 2011 for stores with areas of over 300 square metres and then toned down in January 2015 for stores of over 400 sqm had hampered the expansion of foreign-owned retail chains, their Hungarian-owned competitors failed to grow stronger. However, if the permission procedures were to exert a major impact on market competition, several players of the sector would be forced to rethink their commercial policy.
Due to the so-called "plaza ban", it is already much more difficult to open new stores than before the regulation was implemented in 2012. Subsequently, over the last few years if a business wanted to grow it was easier to buy another store and refurbish it to match its own profile.
Sector players believe that the extension of permission procedures is aimed at preventing sections of warehouses from being transformed into sales areas or start a different commercial activity by reorganising the firm’s commercial policy. The regulation ties the hands also of those retail chains that would take over the operation of a store from another chain on any given location. Note that a number of retail chains have taken over stores recently from their competitors.
Some stores of Hungarian-owned retail chain CBA have been acquired by Lidl and Spar, for instance. A former CBA store will be opened under the Spar flag on Andrássy road in downtown Budapest on Wednesday. An Aldi store will be opened in Kaposvár at the location of a former CBA Cent, while Tesco announced last Thursday that it has refurbished one of its units in Celldömölk in Vas county.These few examples also reaffirm that while the plaza ban announced in December 2011 for stores with areas of over 300 square metres and then toned down in January 2015 for stores of over 400 sqm had hampered the expansion of foreign-owned retail chains, their Hungarian-owned competitors failed to grow stronger. However, if the permission procedures were to exert a major impact on market competition, several players of the sector would be forced to rethink their commercial policy.
