PMR Retail Insight: Central Europe
Kropka Relaks was a coffee shop-style chain managed by retail giant Jeronimo Martins. As a pilot project, it lasted for four years and had five units in total in Warsaw and Sochaczew. The sites were something between a café and fast food restaurant. It offered coffee and cakes as well as hot dogs and hamburgers.
Sfinks has decided to take over 100% of Da Grasso's shares, a leading restaurant chain that specialises in pizza. It is worth mentioning that Sfinks tried the same acquisition in 2009, but at that time both De Grasso and Sfinks required restructuring, so the latter decided to opt out.
In 2014 there was a correction in the market of home electrical appliances, attributable to the high-base effect from the previous years, caused partly by an increased demand for new TV sets after the analogue signal was switched off.
The number of major clothing and footwear retailers having online operations is increasing in Romania: Inditex has an internet store for each of its brands, while H&M recently launched its online store. In the next few years, more retailers will enter this channel.
There is a region-wide trend of consumers increasingly preferring to do their shopping more often, spending less each time. The strong development of convenience stores, supermarkets and discounts has enabled and even encourages such a trend.
E-commerce Holding has acquired a majority stake in prodeti.cz, one of the leading Czech e-shops with products for children, e15.cz reported. The value of the transaction was not made public. E-commerce Holding previously owned only a minority interest in prodeti.cz.
Sklizeno and Nas Grunt, two grocery chains that specialise in selling produce mostly from Slovak and Czech farmers and suppliers, are planning expansion in 2015 and are expecting to record increases in revenues compared with 2014, e15.cz reported.
Ilona Benesova Armentano has closed down the two Babyluxury boutiques in Prague city centre, idnes.cz reported. The stores had been running a clearance sale until mid-June, selling off remaining stocks at 70% discounts. Mrs Benesova Armentano acquired the boutiques in 2012.
Bon Bon, the Czech chain specialised in chocolate products, in April 2015 decided to close its only store in Austria, just months after its launch in December 2014, franchising.sk reported. The store was located in Vienna. As the owner Petra Kovandova told the website, the decision was not due to low consumer interest, but because it proved difficult to manage the store from the Czech Republic.
The combined store count of AB's affiliated franchise chains could exceed 2,000 in the next few years, up from the current 1,540, CEO Andrzej Przybylo said in an interview with ISBNews.
In the Grocery retail in the Czech Republic 2015 report, PMR predicts that in 2015-2017, the Czech grocery market will stay on upward curve. Some large retailers are now focussing on optimising their chains, refreshing or downsizing their stores and improving the offer instead of opening new stores, as the latter solution brings little additional revenues. However, economic conditions are improving, so we forecast further positive dynamics in the grocery market in upcoming years. Fierce market competition has led to its further consolidation and this trend is to continue in the following years.
Wearco, the company behind answear. com, the multibrand online fashion store, plans to launch websites in Ukraine, Romania, Hungary, Belarus and Kazakhstan in the next two years, owner Krzysztof Bajolek revealed in Puls Biznesu.
Retail sales of household chemicals and cosmetics in Hungary reached HUF110bn (€354m) in January-April 2015, increasing 6% year on year, according to data from Nielsen, trademagazin.hu reported. In terms of volume, sales of household chemicals and cosmetics were 1% higher in a yearly comparison.
The Hungarian grocery market is dominated by modern retail. The hypermarket channel used to be the largest modern retail channel for years, however, due to changing consumer attitudes, it has lost its lead to supermarkets, according to the PMR report Grocery retail market in Hungary 2015.
International DIY retailers present in Hungary, such as OBI, Bauhaus and Praktiker improved their net results in 2014, retail.hu reported.
Retail sales at current prices decreased by 1.5% y-o-y in April 2015, according to data from the Central Statistical Office (GUS). In comparison with the corresponding period of 2014, sales were up in six out of eight main branch specialisations.
Retail chains active in Poland spent nearly PLN 284m (€68.2m) on advertising in the first quarter of 2015. This represents an increase of PLN 93m (€22.3m), or 49%, compared with the same period of 2014, according to a report by Instytut Monitorowania Mediow IMM).
The proportion of hypermarkets in Poland that have at least one discount store within 500 metres increased from 24% in 2009 to 43% in 2014, according to calculations by research firm Market Side published by Wiadomosci Handlowe. The percentage of hypermarkets with at least one discount store within a 1-kilometre radius increased from 62% to 78% over this period.
Polska, indicated in an interview with Puls Biznesu. The tough, deflationary environment is forcing a strategy rethink and reassessment of business models, particularly among those retailers who had opened new stores at a rapid pace with no regard for profitability. This creates a growth opportunity for E.Leclerc, Mr Magre said. In discussing possible acquisitions, it will be important for E.Leclerc to make sure that it secures ownership of the sites on which stores are located, he added.
The proportion of supermarkets in Poland that have a discount store within a 500 m radius increased from 51% in 2012 to 54% in 2014, according to calculations by research firm Market Side published by Wiadomosci Handlowe.
The leading discount chains in Poland are increasingly coming into direct competition with each other, with the phenomenon most in evidence in western Poland and in Slaskie, according to calculations by research firm Market Side obtained by Wiadomosci Handlowe.
Biedronka has overtaken Lidl in terms of the number of items in the product assortment, after it added nearly 500 new SKUs in the last two months - an increase of almost 25%. This expanded its product list to over 2,400 SKUs, compared to Lidl's 2,200, according to a study by research firm ABR Sesta for dlahandlu.pl.
Jeronimo Martins has decided to abandon the project to develop a chain of cafés under Kropka Relaks brand, Puls Biznesu reported. Kropka Relaks had five pilot locations, in Warsaw and nearby Sochaczew, and they were all closed down as of 1 June with the entire staff offered employment at Biedronka stores, the paper reported.
Poland's retail stock is growing at a much faster rate than consumer spending. Therefore, an accurate identification of a shopping centre's catchment area and the potential and needs of the target population are the main challenges facing mall operators as they search for effective positioning strategies, according to GfK.
Aldi, the German discount chain, on 10 June opened its first store on the Warsaw market. It is located in Targowek district and has 1,200 m2 of retail space. There is a parking lot for about 90 cars outside the building. The Warsaw store marks a new departure for Aldi, which has so far focused its expansion on the west and south of the country.
Listed restaurant group Sfinks on 19 June announced that it has signed a letter of intent to buy 100% of shares in Da Grasso, the leading Polish franchisor of pizza restaurants, for PLN 55m (€12.3m). The sellers are Karolina Rozwandowicz and Magdalena Pirog. The parties have undertaken to negotiate in good faith to agree the full details of the deal by 14 July 2015, and to finalise the transaction by 31 March 2016. The transaction is subject to several closing conditions, including approval from the Office of Competition and Consumer Protection (UOKiK).
Poland is a tax paradise for food trucks, with mobile eateries enjoying more favourable tax treatment than fixed-location bars, Rzeczpospolita reported quoting tax experts. First, food trucks do not pay the property tax, as they cannot be assigned to any category of buildings. Second, they do not pay the so-called market charge levied on open-air traders, because under a Finance Ministry interpretation, food trucks are service providers and not sellers. (The charge is levied only on the sale of finished goods, such as drinks or sweets.)
CHI Polska, the operator of the Costa Coffee chain in Poland, has entered into a pilot collaboration with Lotos Paliwa, the second-largest domestic petrol retailer, to install its Costa Express coffee machines at Lotos' filling stations.
Medicine, the Polish brand of young women's fashion, plans to expand its domestic network to an ultimate 120 stores over the next four to five years, from the current 70+, owner Krzysztof Bajolek told Puls Biznesu. 120 stores appears to be the optimal scale for Medicine in Poland, even though competitors are opening even more locations, he explained.
Medicine, the Polish brand of young women's fashion, will open its first store in Slovakia in the next few weeks, as part of a foreign expansion programme that will see it open more than 10 branches abroad in the rest of 2015, owner Krzysztof Bajolek told Puls Biznesu.
Monnari, the listed retailer of exclusive women's clothing, on 15 June 2015 announced that an audit firm has estimated the goodwill value of trademarks related to its eponymous brand at PLN 139.2m (€33.5m).
Pawo, the Polish clothing retailer, will open a store for its new brand of women's apparel Mon Ami in Warsaw's Wola Park shopping centre in September 2015 with the aim of demonstrating the concept to mall operators, Managing Director Marek Ziolkowski told retailnet.pl.
The Greek-owned toy retailer Jumbo posted net sales revenues in Romania of €17.3m in the period 1 July 2014 - 31 March 2015, i.e. the first nine months of its current fiscal year. This represents an increase of 184% year-on-year.
The Romanian organic foods market is worth some €150m annually, and if exported organic products are included it reaches even €200-250m, according to estimates from the Agriculture Ministry, economica.net reported. The biggest organic dairy producer by revenues is Dorna Lactate, a company owned by the French group Lactalis. In the eggs segment, the largest Romanian supplier of organic products is Oua de Tara, a company set up in 2009.
There is a region-wide trend of consumers increasingly preferring to do their shopping more often, spending less each time. The strong development of convenience stores, supermarkets and discounts has enabled and even encourages such a trend. Slovaks seem to be less under the influence of this trend because both consumer surveys and forecasts for the hypermarket channel development suggest that the majority of Slovaks still take large, weekend shopping trips that cover their needs for at least a week.
The most popular channel on the Slovak grocery retail market is the hypermarket channel and due to the slow change of consumer attitudes in Slovakia, it will keep its lead in the foreseeable future, according to PMR report Grocery retail in Slovakia 2015. However, a trend change is to be expected in the medium term because according to the survey, there is a correlation between the number of shopping visits and age: younger people are more likely to do several smaller shopping trips to smaller stores. Still, the rate of decline will be among the slowest in the region.