ELOMAS: What brought the ‘dive’ from 1.2 billion to 500 million

By Giorgos Lampiris

In 1994 and at a time when the spread and further strengthening of the large supermarket chains was intense, five smaller businesses in the sector gathered at the Kapsis hotel in Thessaloniki. The expansionist tendencies of the Marinopoulos group, which is a thing of the past, having been completely absorbed by the Sclavenitis group, but also the development path followed by the bankrupt Atlantic were some of the reasons that led to the gathering of business forces. At the same table were the Galaxias S.A. companies. – Dimitra Market, which in 2020 was acquired by the Cretan group SYNKA, Galinos Lautaris based in Evia, which was acquired by Atlantic in 2022, Ountsidis based in Drama, Biskas from Thessaloniki, which was acquired by Masoutis, and the then INKA of Chania, later SYNKA, which last February entered a new era with the creation of the joint company SYNKA Crete Hypermarkets together with the Masoutis group.

The co-banks of ’94, and following the initiative of the then Deputy Minister of National Economy, Nikos Skoulas, proceeded to establish a Greek group consisting of small and medium-sized Greek supermarket businesses. The name of this group was ELOMAS. Of the founders of ELOMAS, today the only one who remains in the scheme is Draminos Christos Ountsidis, while SYNKA also recently left the scheme after the agreement with Masoutis.

The acquisition of Cooperating Grocers by Cretikos

The highly fragmented Greek market, which, apart from large supermarket chains, hosted and continues to host a large number of businesses, has in recent years shown strong concentration trends. However, recently the disarmament of the creation called ELOMAS has acquired a more intense character. The most recent development, which emerged last week and is expected to be formally ratified with the signing of the contracts, is the acquisition of the SYNPA (Associating Grocers) group, based in Thessaloniki. The business, which manages a wide network of franchised stores exceeding 300 points, but also approximately 50 privately owned stores with a turnover of 94 million euros in 2021, is being acquired by the ANEDIK Kritikos group, with a turnover exceeding 400 million euros for 2021 .

It was preceded in June by Market In’s acquisition of the Hara company from Chios, the island’s largest local chain with a turnover of 15.2 million euros. And this particular company, a member of the ELOMAS group, was de facto excluded from the shopping group after its absorption by Market In. Before Chara, however, it was one of the founding members of ELOMAS, SYNKA (formerly INKA), with a turnover of 235 million euros, which after the agreement with Masoutis followed a different path, as had already happened with several large or smaller chains . A turning point for ELOMAS is considered to be 2020, when the then largest companies in terms of turnover left, Kritikos with a turnover of 390 million euros and Bazaar with 190 million euros in the year of their withdrawal.

The disagreements

In the intervening period until today, milder and even more intense disagreements have appeared between the members. For 2022, perhaps the most characteristic of them was the one with businessman Konstantinos Pitsia, and owner of the eponymous business from Pieria, who questioned the procedures followed inside the shopping group, at the same time requesting the change of management (management committee) through of carrying out antiquities.

The occasional questioning of the group’s operation has been dominated by claims of deals with suppliers and industry moving at different speeds. This practically means that a larger chain of the group maintains, for example, better discounts on the purchase of yogurt quantities compared to a smaller one, despite the fact that both were members of the ELOMAS group. After all, this was also one of the main disagreements with Pitsias, who was removed from the group only a short time after joining it.

From 1.2 billion to 500 million euros

Perhaps a key issue for ELOMAS was that, in addition to being a shield against possible takeovers, but also a vehicle for strengthening the smaller ones with commercial agreements that included better terms than those that would have been achieved if they had acted independently, the limits or room for development that it left for each individual chains were and remain specific. That is why, after all, and gradually all the bigger ones, Bazaar, Kritikos and SYNKA, sought their fortune in different ways. A field of disorganization was created more widely by the internal quarrels and confrontations, the claims of different business deals and rights among its members. On top of that, however, a market person specifically mentioned to our question about what is the main disadvantage of ELOMAS, that at the moment “the group is run by the members who want to be sold, so no one has an interest in creating something new”. The bottom line is that, from 1.2 billion euros in 2020 (on Kritikus and Bazaar), currently the total turnover of the members has fallen to 500 million euros, which demonstrates the extent of the weakening of the group.