Grocery Store Chain Spurring Impressive Economic Growth
Gomex is the fastest-growing grocery store chain in northern Serbia. It began in 1995 as a wholesale company with only 3 employees. The company follows a neighborhood-supermarket concept by which its stores are big enough to offer a wide selection of products at competitive prices but small enough to be located near their customers in congested urban areas.
By 2007, Gomex needed funds to purchase land plots and equipment for its new stores and to acquire a new ERM system in order to enhance supply chain management. Gomex also needed working capital to foster further sales growth
SEAF invested in 2007 through the South Balkan Fund. Recognizing that financing alone was not sufficient to support the competitive and sustainable growth of the company, SEAF provided Gomex with extensive pre- and post-investment business assistance. SEAF recruited specialized industry experts to provide training to employees across all organizational levels to maximize the potential of Gomex’s rapidly growing workforce. Gomex’s middle and senior management staff received training in customer relations, management, finance, human resources, taxes and inventory management. Store managers attended workshops on quality of service, customer loyalty, and merchandising. SEAF also assisted Gomex in the selection of a new information management system to improve overall operational efficiency. In order to improve industry competitiveness, operational standards, and financial efficiency, SEAF organized a 3-day visit for Gomex’s senior management to a Dutch supermarket chain. The CEO of SPAR Poland, one of the world’s largest food store chains, visited Gomex stores and advised Gomex’s CEO in the area of store layout, cost management, merchandising, and expansion planning. Lastly, SEAF played a vital role in selecting Gomex’s management team, analyzing the potential acquisition targets, negotiating favorable financing terms, and providing assistance in the overall growth strategy formulation.
As a result of SEAF’s partnership and aggressive business assistance, Gomex has successfully and sustainably expanded. In the years following SEAF’s investment, employment at the company went from 302 to 1,087 in 2013, and Gomex grew from 16 stores in 2007 to 120 in early 2015. Despite the global economic climate, Gomex experienced a 35% increase in sales in the first half of 2010, compared to the first half of 2009. The company’s customer base has also been continuously increasing, due in part to a new customer loyalty program and a new customer loyalty card. Gomex is now the largest and most well-known grocery store chain in Banat County in the northeast region of Serbia.
In addition, Gomex has significantly increased the number of local suppliers with which it works, including many local farms, whose produce is directly purchased by Gomex. Gomex’s use of local suppliers has not only helped to keep the company in good standing while the local currency has depreciated, but has also generated positive environmental and nutritional spillovers and a meaningful, indirect impact on employment and economic growth. Lastly, Gomex financially contributes to the expansion of local schools, municipalities, culture and sport events, and a hospital while also sponsoring an environmental organization that focuses on re-forestation and other environmental issues.
U.S. Ambassador Michael D. Kirby visited GOMEX in November 2014 and stressed the value of the SEAF South Balkan Fund in Gomex’s efforts. Ambassador Kirby stated, “I encourage business owners throughout Serbia with good ideas and vision, and commitment to growing their companies and their communities, to consider the positive contribution that a minority investor can make. I have seen first-hand the entrepreneurial spirit and talent Serbia has, and I firmly believe that there are more potential success stories like GOMEX that can spur the economy.”