Supermarket
Retail in Eastern Europe – Czech Republic
Tuesday, October 28th, 2008 | University | No Comments
From the mid-1998 the Czech retail market showed a continuous growth which speeded up sharply in 2005. Retail sales increased by 4,9% in 2007. Since then, this dynamic growth has apparently slowed down and the market especially for shopping centres and hypermarkets reached saturation at least in cities like Prague.
The allocation of retail area is dominated by the metropolitan region of the capital Prague, the Moravian-Silesian Region, Ustecky Region and South Moravia (see fig.1) with 120-150m²/ p.c.
It is not so long since 1998 there have been just 7 hypermarkets in Czech Republic, whereas the number increased to 231 hypermarkets in 2008. By now the penetration of hypermarkets is the highest in the Central Europe region (16 per 1 Mio. inhabitants). An important reason for this continuous expansion is the high preference for large-area shopping places for grocery by the Czech. With 38% market-share hypermarkets dominate the grocery shopping, followed by the discounters (25%) and supermarkets (16%). Especially in the category of durable food products hypermarkets retain their top position (33-39%). Generally, large-area food retailer (hyper-/supermarket, discounter) have got high preferences with 75-83%. Smaller specialized stores have an inferior position but play a big role at the fresh-food market segment.
Consumer Market Trends
In future increasing per-capita incomes will change the demand situation at the retail market in Czech Republic. The needs and motivations of customers will become more and more diversified. Their increasing interest in “life quality” products such as bio-food and generally quality fresh food (bread, pastry, meat etc.) will strengthen the position of specialized shops with more service and personnel quality. Approximately one half of Czech prefers to purchase those goods in small non-self-service stores or smaller groceteritas (e.g. butchers`s). The growing request for “new/affordable luxury”, covering also the higher interest in health-conscious life, and the preference for specialized drugstores, contribute to the withdraw of hypermarkets at those sensitive good categories. The change for better, in terms of smaller store formats, a more diversified range of products, better service and performance characterize the main brand change strategies of big retail chains in the near future.
The concentration of trade will go on and a small group of three or four retail chains will get segregated. In 2005 the competitive Czech market pulled out major retail chains (Carrefour, Edeka, Delhaize) hence about 45% market-shares are held by just a few retailers (Metro, Ahold, Schwarz, Globus). Besides the consolidation of the existing retailers many experts anticipate the entry (through acquisitions) of retail giants, as Wal-Mart or Aldi.
According the project “Retail Vision 2010” by INCOMA Research and Blue Strategy, the fastest growth is expected with discount stores from current 13% to 17% in 2010 and small-scale hypermarkets (up to 4 000 m²). Several retail chains build new hyper-/ and supermarkets in smaller versions to make it possible to operate in areas with a smaller number of customers or in city centres. A shift of destination for new openings of hypermarkets is expected. Townships below 50 000 inhabitants and even with only 15 000 inhabitants are targeted on by big retail companies as Kaufland, Hypernova or Tesco.
Retail Market – Slovakia
Wednesday, October 15th, 2008 | University | No Comments
Slovakia records one of the fastest growing rates of retail sales in Europe. An increase of 5,5 % in 2007 (7,5% in 2006) shows the dynamic development at the retail market in Slovakia. Most activity in country is still concentrated in the capital Bratislava. The International Survey 2007 ranked Bratislava at the forth position right after Moscow, St. Petersburg and Prague in terms of the attractiveness for international retail companies (inside CEE). The two NUTS2 regions Bratislavskiý Kraj (around Bratislava) and Stredné Slovensko (Košice, Žilina) will experience most of the investments in retail in the next ten years (see Fig. 1). Retail planning environment remains favourable, with currently no size limits or restrictions on retail development, albeit with bureaucratic intervention from public bodies.
There are three main groups of retailers in the country: co-operative societies, international players and domestic independents (small shops/kiosks). Western grocery retail companies like Tesco, Rewe (Billa) and Schwarz Group (Kaufland) expand in Slovakia since 2000. By now there are about 293 outlets in Slovakia. Most of them are large-area hyper-/supermarkets or discount stores. None the less the Slovak retail market is still dominated by a Slovak co-operative Jednota Slovensko with 2 318 small format outlets (mostly supermarkets / cash & carry). The dominant preference position of self-service stores with 35% market-share, followed by the supermarkets (29%) and hypermarkets (23%) mirrors the scheme of the retailer market-shares. Although the number of hypermarkets increased from 10 in 2000 to 91 in 2006, many customers still prefer grocery shopping at small-format stores. For reasons of time-saving especially smaller households favour self-service outlets which offer a sufficiently wide range of foodstuffs and basic non-food products.
Market Trends & Retail Formats
Though smaller supermarkets remain a very strong sales channel at the Slovak retail market, mainly because they meet the demand of smaller towns and municipalities, the latest trend indicates a change in purchasing behaviour of Slovak households. The preference for shopping in large-scale shopping centres and hypermarkets, particularly in the capital Bratislava is to be anticipated. Galleria shopping centres in the city centre, anchored by a hyper-/supermarket, and four western-style shopping malls at the “Greenfield-side” of Bratislava build the starting-position for the further retail development in the country. The year 2006 marked a significant turning point in terms of the number of newly-opened shopping centres. Four middle-sized (up to 24 000m²) were built in Tranava and Martin. Six large-scaled (up to 88 000m²) shopping malls will be opened until 2010 in the vicinity of Bratislava and one in Žilina.
Retail in Eastern Europe – Poland
Thursday, September 18th, 2008 | University | No Comments
Polish retail market has gone through a rapid transition over the past 15 years. In 2006 sales in retail increased by 8 % and 2008 more than 1 Mio. m² new, modern retail area will accrue. The number of outlets for food-retail also increased up to more then 120 000 units in 2006 with more then 3400 hypermarkets (410) and supermarkets (3003).
With 137m² modern retail space per 1 000 inhabitants Poland has further potential for retail developers (Western Europe average is 200m²/1000 inhabitants) especially in smaller towns since the markets in larger cities are saturated (with 600-800m²/ 1000 inh.). Further constraints for developers result from new (planning) regulations concerning “trade during certain holidays” and “building approvals” for new shopping centres.
The internationalization of the Polish retail market compelled domestic food retail companies to a consolidation process. Emperia Holding is one of the largest Polish retail/wholesale companies which is at market since 1990 and ranks on the 7th position (by profits) among the Top ten retailers at the Polish retail market in 2006.The market leaders are represented by well-known international retail companies Metro (1), Tesco (3), Carrefour (4) and Auchan (5). A Portuguese retailer Jeronimo Martins Dystrybucija (JMD) is the second-largest retailer with more than 1100 outlet-stores across Poland. As the research of GfK indicates, Biedronka (store-chain name of JMD) is the most deeply rooted chain of stores in the customers’ awareness. As small-format supermarkets with an area below 100m² still dominate the Polish market, the Biedronka remains the most popular shopping place for over 55% of the customers.
At the moment, about 94% of total retail outlets have still a trading area below 100m². The greater part of the people (36%) prefers still small stores to make their shopping. On the other side about 24% of Poles prefer the hypermarket as the main shopping place for food. The strong competition from modern (western) companies is continuously weakening the position of traditional distribution channels. Statistics indicate that more shoppers are turning to hypermarkets and the number of people who visit a hypermarket more than once a week doubled compared to 2000 from 19% to 40% in 2005. The number of hypermarkets increased in 2006 by 12 % as well as the amount of supermarkets with an 11% increase. Concerning big retailers as the Metro AG (Real) , Tesco or Carrefour who represent the retail market mostly by hyper-/supermarkets the future development at the Polish market will certainly be positive.
Consolidation among foreign retail chains already straightened the market position of Metro AG, through acquisition of Geant (Casino) and Carrefour of Ahold (NL) in 2006.
The next five years will see very dynamic structural changes in retail trade. Hyper-/supermarkets and discounters will become the leaders in food-retail. The two last-mentioned distribution channels are predicted to develop quicker than other shops. The number of specialized stores will decrease as well as corner grocery stores. Especially, the increasing competition in larger cities from foreign chains will contribute to the withdraw of domestic small-area shops. In rural areas the trend is in contrary the growing number of small shops by domestic retailers. In response to this, foreign companies adjusted their strategies and introduce also smaller shop formats outside urban areas. So the French purchaser Carrefour set up mini-hypermarkets and Carrefour Express with sales-areas of 800-2000m² and announced to continue its expansion.The intense competition adds to more diversity of marketing strategies in terms of quality, brands, efficiency and service.