He sells a roll a third cheaper and says: Chains have high margins – Seznam Správy

The shop of the small network Pays off in Radotín is exaggeratedly reminiscent of a reading club. There are not many customers here in the morning, they are mostly seniors and they usually have one thing in common – they study etiquette honestly. They are trying to find out when butter, salami, cheese or other foods will be sold, which are significantly cheaper than at a multinational competitor a hundred meters away.

Butter from the Olma dairy costs 42 crowns, but there is one day left until the use-by date. After that, it cannot be sold and should not be consumed. A salami from Germany weighing 650 g costs 99 crowns and lasts for two days. But other goods, for example full-fat milk from Madeta, are four kroner cheaper at the non-promotional price and will be sold out only in June.

The network has grown on the offer of goods before expiration and still offers them, but wants to get rid of the “discount” label. Today, according to the owner Michal Soukup, most of the items offered have a normal minimum shelf life or consumption period.

“Originally, the overwhelming majority of us sold promotional goods, which we raised in various ways,” says the owner. As the network grew, there was little in the market for pre-sale goods, and it had to start focusing on the range offered by multinational chains as well. At the same time, they have recently been expanding the offer of discount foods that spoil quickly.

Shortly before the expiration date, they place the food in separate compartments, boxes, or leave it on the shelves in a common place with a visible label warning that it will not last very long.

“Recently, sales of pre-expiration items have increased. While earlier customers did not perceive these goods very positively and did not want them, now they are listening to the signals to waste less and at the same time they want cheap food. They are now very popular among people,” said Albert Jiří Mareček, a spokesman for the chain of stores.

Today, Pásplatí has ​​in its offer most of the goods that are also offered by large multinational chains. In addition to food, there are pet supplies, drugstores, and household supplies. “More than 80 percent of the assortment already consists of stable goods that you can find in stores, but we don’t have as high margins as the chain stores,” he explains, explaining why, for example, a roll costs 1.90 kroner, while the competition costs 2.90 kroner.

“Our prices are on average forty percent lower than chain stores. The chains don’t brag about the margins, but given that we know how much the product costs and how much it’s available in the chains, I can assure you that the average chain margin is around one hundred percent,” he said.

The company MJ Foods, which operates the stores, did not publish the economic results for last year. In 2021, according to the financial statements, it increased its annual turnover from almost 358 million crowns to 400 million CZK. The profit was only minimal, 299 thousand, or 316 thousand crowns. The company employs 140 people.

Clear rules apply to the sale of goods before expiry. Food with an expired minimum durability date (perishable food) can continue to be sold if it is safe for health and is correctly labeled and placed separately. Perishable foods such as yogurts, meat, sausages, cheeses, etc., which are marked “Use by”, must not be put into circulation after they have expired, because they are not considered safe.

However, many consumers still do not distinguish the essential difference between the minimum shelf life and the use by date (use by) and prefer to avoid foods that are “on the edge”.

“We have struggled with this for many years. We used to sell goods even after the minimum expiration date, but four years ago we abandoned this model. We evaluated that sales are already so small as a percentage of the total turnover that it is not so interesting for us and it handicapped us with many customers. They had us boxed in as a store where expired goods are sold and where they won’t go as a matter of principle,” said Soukup.

At the same time, the business started with deliveries from its own wholesaler, among other things, to stores with discount goods. It currently has eleven brick-and-mortar stores. Three in Prague, in Dubí, Litvínov, Most, Teplice, Pečky, Poděbrady and Sadská. The last store to open is the store in Příbram, which is also the first franchise. He wants to continue on this path. The network should grow by dozens more stores.

“We will no longer build our own stores. We have the first franchise concept in Příbram, we will open in Vestec in two months, and we will only grow in the form of franchises. We would like to open 30 to 35 stores within five to seven years,” he outlined the plans.

Traders with pre-sale goods also exist in the area of ​​non-food assortment. For example, the Levno network, which started with “Everything for 50” stores, grew to 19 stores and annual sales of 100 million crowns in six years.

“We founded the company with my partner Martin Forte (both of us have a history of more than 20 years in large chains) with the fact that it bothered us how excess overstock, overproduction and unnecessary goods were handled. These goods used to be thrown away, burned and otherwise needlessly disposed of. Today, we are one of the largest buyers of these goods both from the Czech Republic from large chains and from E-Shops and from the entire EU,” says Calabar Invest co-owner Michal Stadler.

Some goods have unwrapped packaging or a minor cosmetic defect, and customers buy them tens of percent cheaper. The store also tries to keep the price as low as possible by buying its own equipment, including IT equipment and shelves, second-hand.