Central European markets such as Poland and the Czech Republic will reach saturation point next year if retailers' expansion plans are realised, claims a new IGD Market Focus report on the region. Assuming international players such as Tesco and Carrefour stick to their business plans, hypermarket growth in the region will rocket 57% between 2000 and 2002, and there are doubts about whether consumption will be able to keep pace, claims the report. As central Europe becomes overcrowded, retailers will look eastward to Romania as well as China, Japan and South America, predicts IGD international programme manager Louise Spillard. Goldman Sachs analyst Nick Jones said: "There's a lot of activity but within that there is very varied performance and a lot of ineffective capacity. Most operators are expecting some consolidation within a couple of years." Whether Japan will prove to be the key market for growth in the next decade is still up for debate, said Jones. "The big question is going to be China and whether retailers can secure agreements centrally with the Chinese government." Tesco said it hadn't ruled out a move into Romania but the Far East was higher up the agenda, as teams have spent the last 12 months researching the market. Whether overcrowding in the east prompts the big players to turn their attention back to western Europe remains to be seen, said Jones. "People are still waiting to see whether the Carrefour/Promodes merger will pay off and things have calmed down after Wal-Mart's entry." Mintel Corporate Intelligence analyst Bryan Roberts said the "feeding frenzy" that would commence if Metro started to streamline its operations in Germany could prove a catalyst for major merger and acquisition activity. {{NEWS }}

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