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“There is room for expansion in the market. We see that some companies are leaving retail parks, thus freeing up space or regrouping,” he described the situation in an interview for SZ Byznys head of discount store with fashion KiK Martin Satan.
The German company will open 11 new stores this year, thus continuing at the usual pace and already has 240 stores in the Czech Republic.
“I’m surprised that developers and landlords will build more retail parks and projects. Today, we have about 20 to 25 offers on the table,” Šatný mentions that the interest of landlords is higher than the speed of the expansion. Retail parks are shopping centers with a small number of shops without covered parking, recently built especially in small towns.
KiK’s progress confirms the trend in conquering villages. Some chains with too many food offerings, such as The penny market at least Bill.
“The trend is to go to cities with smaller population. We are talking, for example, about cities with four to six thousand inhabitants. The base is food and a few other shops,” said the KiK chief.
Not only because of the active construction of shopping parks, there is still room for businessmen to expand. Free capacities are also a result of market reorganisation. “Supermarkets are reducing their areas and offering places. And the same for electronic retailers,” he said.
according to Soukup Tomásdirector of retail division JLL, which leases commercial space, in addition to grocers and electronics retailers, some sports stores are also downsizing.
“He’s the only one building big stores today Decathlonwhich will attract them with strong marketing and its own product line,” he said. Grocers are still betting on supermarkets Kaufland. And in electrical appliances, the days when Electro World (now Data) residential halls with an area of five thousand square meters, where very similar products were often displayed.
“Store sizes are shrinking naturally as companies invest more in online and transform omnichannel so that the customer can see the item in the store and have it delivered to their home,” said Soukup. .
Omnichannel is a way to combine physical and online shopping, when, for example, a customer looks at products in a store and orders online or vice versa. KiK launched an e-shop a month ago, its competitor Pepco has avoided online until now.
New competition
In fashion, stores aren’t declining because big stores weren’t being built. However, the competition is getting bigger and bigger, chains are occupying new buildings at a fast pace, and a new discount player from Germany, Woolworth, is also coming to the Czech Republic. It sells clothing, household items, decorations, shoes, drugstores, cosmetics, stationery, toys and home furnishings. Most of the goods available are for less than three euros.
Entering the market requires a significant investment in marketing and expansion, otherwise the brand may compete with well-known brands such as Pepco and KiK. This is what happened to the German discount chain NKD with a variety for the whole family.
NKD closed five loss-making stores this year, for example in Hodonín, Český Těšín and Hranice, and currently has 41 stores in the Czech Republic. “There are several factors behind this. Strong competition, but also the fact that NKD is still an unknown brand in the Czech Republic,” explained Jiří Wegmann, expansion manager in the Czech Republic, to SZ Byznys.
According to him, it is a paradox because Pepco, one of the main players in the country, withdraws from the German market just because of the strong activity of the NKD chain. However, the German company did not pay much attention to this brand in the Czech Republic and entered the market relatively late.
“Maybe we’ll go at a slower pace. Instead, we want to focus on big cities like Prague, Brno and Ostrava. We will go to bigger shopping centres, because it worked for us in the capital. In some retail parks, there was almost nothing left to pay the rent,” Wegmann said.
Overall, however, fashion retailers do not seem to be holding back on expansion. “The shops are not closing. I think they are doing well because people still want to save. The T-shirt will be purchased at the Pepco store in Gantt,” said Soukup from JLL. On the other hand, they drivefor high volume and low margin. According to him, the Pepco networks and KiK is saturated due to the large number of stores and they are carefully looking for new places.
The fact is that, compared to the beginning, they have slowed down the pace of opening new stores. “We are carefully considering where to go and whether it makes sense in the given space,” said KiK’s Šatný. The chain already has so many stores that each new one could block the traffic of another branch of the brand.
What is a retail park?
- Retail shopping parks are located on the outskirts of cities or in small towns. It usually consists of a hypermarket as the basis for people’s shopping, with other independent stores adding to it, often of the discount type.
- Unlike a complex of stores in shopping centers, each such store has its own entrance and exit.
Fifteen shops a year
The Dutch chain Action, which is considered the fastest growing discount chain in Europe, continues to expand in the country. It has opened 78 stores in the country since 2020, and so far this year there have been 15. It opened 19 shops last year.
“We are experiencing strong customer demand for Action stores in various categories, so we will continue to expand to meet this demand,” Jan Štěpánek, Operations director for the Czech Republic, told SZ Byznys.
Action is aimed at the mass consumer looking for ultra-cheap products of all kinds from household items to sustainable food. The average price of the item in the shop does not exceed 50 crowns. It differs from the competition by changing part of the field frequently.
The network began to focus more on Prague, where the average purchasing power is higher than in the regions. It already has ten stores in the metropolis, on the other hand, some are smaller than the minimum of a thousand meters.
The Dutch company has been growing rapidly in Europe in recent years, they already have 2,750 stores in 12 countries.
2024-11-25 15:10:00
#series #concessions #Czech #Republic #competition #tougher #Seznam #Zpravy
Considering the saturation of markets like Pepco and KiK, what are the potential drawbacks for both retailers and consumers if these markets become oversaturated?
## Open-Ended Questions for Discussion:
**The Czech Retail Landscape & Competition**
* The article mentions that strong competition is a major factor impacting businesses like NKD. How does strong competition affect the consumer in terms of price, choice, and quality?
* Pepco and KiK are mentioned as saturated markets. What are the potential consequences of a saturated market, both for businesses and consumers?
* Does the rise of discount retailers like Pepco, KiK, and Action signal a shift in consumer priorities? What are the driving forces behind this trend?
**Growth Strategies and Challenges**
* Action focuses on “ultra-cheap” products. What are the pros and cons of this approach to retail, both for the business and the consumer?
* NKD has chosen to focus on larger cities. Is this a viable long-term strategy for them? What are the advantages and disadvantages of this approach?
* Online shopping is rapidly growing. How do physical retailers like those discussed in the article need to adapt to remain competitive?
**Impact on Local Economies**
* While the article doesn’t delve deeply into this aspect, what are the potential impacts of the expansion of these retailers on local communities and small businesses?
* How can local governments encourage sustainable growth in the retail sector that benefits both residents and local businesses?
**Future of Retail in the Czech Republic**
* Where do you see the Czech retail market heading in the next 5-10 years?
* What are some innovative retail trends that could emerge or gain popularity in the Czech Republic?
* What factors will be most crucial for retailers to succeed in the future?
**Thematic Sections for Interview:**
1. **The Rise of Discount Retail:** Discuss the factors driving the growth of discount retailers like Pepco, KiK, and Action.
2. **Challenges for Established Brands:** Explore the difficulties faced by brands like NKD competing against large, established players.
3. **Strategies for Growth and Success:** Analyze the different approaches taken by retailers mentioned in the article, such as location targeting, pricing strategies, and product offerings.
4. **Impact on Consumers and Communities:** Discuss the potential benefits and drawbacks of the rise of discount retail for consumers and local communities.
Remember to encourage participants to share their own experiences, perspectives, and insights.
