• 14/03/2023
• By wizewebsite
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Cheap chains spread by the Czech Republic.Found the customer's weak place<

Článek

Discounts with cheap goods such as Pepco, Kik and newcomers Action, Tedi and NKD have opened dozens of new branches in the last year.They have verified that even though Czechs like to claim that the price is not in the first place, it is not always true.

According to the findings of the SZ business, the five brands opened a total of 117 stores in 2020 and 2021.It focuses mainly on retail parks in regions, ie shopping zones in the open air with several stores, which are often on the edge of smaller cities.

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On average, one store per month since August last year opens the Dutch discount chain Action, which in a year and a half grew from zero to 300 employees and currently before Christmas another 200 temporary workers.Serve 19 stores with an area of about a thousand square meters.More branches in Pilsen and Chrudim will open this year.

“We are very satisfied.Opening new stores goes faster than we planned.The Czech customer appreciated our unique concept, ”praises the director Petr Juliš, who still managed the Penny Market chain sales department in the spring.

What does the concept turn out?The Central Shopping Department in the Netherlands is tasked with changing 150 items from the offer each week.For 1,800 stores in nine mostly Western European countries, 600 out of six thousand items, even two -thirds per year.A third are stars such as the bags in the trash.

"The frequent variation of the assortment is at this time our advantage.When we saw that part of the assortment would not arrive by Christmas, we ordered something else.Logistics problems touch us significantly less than others, ”says manager.When something is too expensive because of inflation, it just removes it from the offer.

According to him, stores do not directly compete other discounts, but actually to anyone who sells a similar range in the shopping zone.Hobby markets, kitchen supplies, interior textiles and equipment, small electronics, toys, multimedia, textiles and food and drink.

Like other discounts, prices are trying to minimize the tool, but also minimum marketing and large advertising campaigns.Over a thousand items costs up to 25 crowns.

A similar composition of goods is offered by the German discount Tedi, which opened its first two stores in the Czech Republic in Prostějov and Opava last year and does not seem to want to play the second violin.

“We planned faster expansion in the first year, but the pandemie changed the situation.There are currently 15 shops in operation and this year we will close with 17 to 18, if Lockdown allows it, ”said Petronela Böhm from the Construction and Expansion Department TEDI.The chain belongs to the Tengelmann Group, which is already operating in the Czech Republic by the KIK discount stores and the OBI hobby market network.

According to Jan Janáček from the real estate-Poradnice company CBRE, Action and Tedi targets mainly for shopping parks, but also for some shopping centers.

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“There is significantly strong pressure on business conditions for these brands and in general cost loads in shopping centers are higher than in retail parks.This is based on the higher operating demands of these commercial properties, ”said.According to him, the place is in shopping centers, but the quality of the quality.

In the first half of this year the largest number of new brands in three years has been added in the domestic retail.These include fashion discounts Halfrice from the Polish group CCC and British Primark.

The influx of new brands at the time of closures, which lasted 230 days, shows how the Czech market is highly attractive and competing.

Pepco is also interested in shopping centers (with the exception of the "A"), which has already opened its stores in Olympia Brno, in Prague's Harp or in the shopping center Letňany.

The Czechs will become cold and will save

Discounts in the Czech Republic have a common handicap, which is the missing e-shop.Maybe because of this, they lost millions on sales.But they did not lose the belief that interest in cheap fashion and consumer goods with price tag in tens, maximum hundreds of crowns.Moreover.

The boom of cheap fashion in the Czech Republic attracts mainly German capital.The KIK network with the Tengelmann Group in the back and Pepco owned by South African-German-Nation Holding Steinhoff International have had their place on the Czech market for years, each over 200 branches and continues in the strategy of flashing shopping parks and centers.

"Covid did not slow our expansion.We opened 21 new stores in the last financial year that ended in September.In the current year we want to add another 20, ”said Managing Director Milan Drahoš.

He admits that more Czechs can seek cheap clothes, toys, kitchen supplies or various accessories in the coming years due to the economic crisis.“Czechs can start saving.It's one of the possible scenarios.On the one hand, sellers of luxury, expensive goods and on the other side of cheap goods sellers could have fewer problems than others, ”he thinks.

The financial plan to overcome sales of six billion crowns, however, Pepco did not meet the second year in a row.According to Drahoš, the company received approximately 5.9 billion, but it still ended up in profit."But in 11 months we lost 150 million crowns because of the pandemic," he added.

His biggest competitor Kik opened three stores last year, this year another five and plans seven new branches next year, which would get to 230.

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“The current economic situation is not very favorable, but we can say that we have been registering an increased interest in goods in Kik stores for a long time.Customers acknowledge advantageous prices not only in the field of fashion, ”said executive Martin Šatný.

The offer of two thirds is the basic fashion that is as minimized as possible by seasonality, especially from Bangladesh and China.However, according to dressing, other goods such as interior decoration, household items, toys or gift items are increasingly popular according to dressing.

Due to restrictions such as the closure of stores or limiting the number of customers, the company fell by hundreds of millions of crowns last year.In 2019, the company had sales of over 3.5 billion crowns and a profit of 420 million.

A relatively new direct competitor of both established players of cheap textiles is the German NKD chain, which has not yet managed to really locate the website into Czech, but has already opened 27 stone shops.See them in large cities like Liberec and Znojmo, but also in the Ovčáry industrial zone near Toyota.