• 28/03/2023
• By wizewebsite
• 451 Views

The state should subsidize lost food in villages, says the head of Konzum<

What is the situation of food stores in the smallest municipalities?In quite critical. In small towns with up to a thousand inhabitants, and especially in towns with up to five hundred inhabitants, the long-term operation of shops is not a business. They don't even make money on basic operating costs. Stores have been losing money for a long time and are basically surviving. Either someone subsidizes them, which is the case with some of our cooperative's stores, or their business is not completely kosher.

Is the situation critical across the entire market? Yes, we are not the only ones complaining that we have a problem. From a certain size of the village, trade is already a business. If he doesn't make money for himself, let him go bankrupt, because he's doing it wrong. The problem is that the smallest towns have so few residents that they will never generate the revenue to cover operating costs such as heating, lighting and the salary of the saleswoman, even if the locals buy everything from that store.

Is it long-term? Yes. But the problem is getting worse. In the last fifteen years, the competition in the cities is increasing, but the turnover of the village shops is gradually decreasing, while all the costs are increasing. Labor costs are the highest. They even grow by order of the state, which increases the minimum wage and the operator has no choice. In some places, however, shops do not even make minimum wage.

Miloslav Hlavsa, director of the Konzum cooperative

What are the salaries in the field?For workers in small village stores, where the salesperson is also the manager and does all the administration, accounting and other things, the gross salary ranges from 12 to 15 thousand crowns gross. People work for low wages. There is no long-term business perspective. Currently, when unemployment is low, we have some stores temporarily closed because there is no one to sell there. With these wage conditions, it is very difficult to find salespeople. We do not want people to work under degrading conditions, but at the same time we perceive the provision of food services as a public service.

What does this mean?We say that grocery stores in small communities are a public service that should be paid for. The state should be more active in this. Help should come either centrally or through regions and municipalities.

How much money could a village grocery store receive as part of the subsidy?To ensure decent operation of the store throughout the year, a village with a population of three hundred would need support of approximately 190 thousand crowns, a village with a size of five hundred population would need around 136 thousand crowns. In order to be able to ensure traffic and basically be at zero. But every village is different.

Shouldn't everyone receive a subsidy in the village?No. Everyone who is perceived as a public service should receive it. Entrepreneurs should not receive subsidies. However, we think that the sale of food is a public service, similar to, for example, traffic service. These are basic human needs that you are entitled to if you live in a small town. The smaller the village, the more complicated the situation. The extremes are municipalities with less than a hundred inhabitants. It probably doesn't make sense to set up a shop for solitude where fifteen people live. There would be no meaningful public support and there would never be a meaningful supply of goods.

How do you want to implement your ideas? We cooperate with the Association of Czech Traditional Trade and the Ministry of Agriculture, which created an interdepartmental commission to solve this problem. We also approached the Association of Regions and representatives of the Union of Cities and Municipalities. The response from these places has been very positive in recent months. Everyone recognizes that this is a problem.

Why do you think Vietnamese people survive in this environment and Czechs don't?Also some Vietnamese shops have been closing recently. It is a problem of the gray economy. In the villages, businesses survive that are either supported by someone, such as a municipality or a cooperative, or a section of entrepreneurs, and I do not want to apply this to Vietnamese businessmen who move in the gray zone of the economy and cheat in order to survive.

Aren't those who are complaining now a little bit of themselves to blame for the problems? People return home to the countryside from work in the city in the afternoon, when the local shop is already closed. No wonder they make purchases along the way.I don't think so. When you are in a village that has a population of 250, the store is not able to support even one person. When you're on your own, you have a statutory eight-hour working day and there can't be much overtime, how do you want to do it? You have to cover it by being open in the morning, afternoon and Saturday. Self-employed people have unlimited working hours, but as an employee you have limited working hours. Why aren't there any merchants like Albert, Lidl or Tesco in any village? Because it wouldn't be worth it to them.

What impact will the electronic record of sales have on your business? It will have basically no impact on us, nor on any other honest trader. It's not a problem for us. The problem is that in many small towns and villages there are those who, for the sake of their survival, did not report all sales and taxes in full. The moment EET sets up a transparent system, they won't be here anymore.

So do you believe that the situation will improve for you with EET? It won't, only in some villages shops will disappear. But that doesn't solve the problem with the economy of the shops. As a consumer, we have a hundred establishments, of which roughly thirty are in small towns, the rest are in larger towns. They are profitable, but not as much as when there was not so much competition from multinational chains. We subsidize loss-making stores, but we are running out of steam and will not be able to keep them in the future.

You are part of the cooperative chain COOP. In the past, it was considered that the chain would be divided into smaller parts in order to achieve a tax advantage for small stores. How far has the plan gone?It hasn't happened yet. It is one of the ideas to convert some small establishments into franchises, but it has not yet been implemented in any cooperative. It would be a step towards some tax optimization, but we are not trying to go down that path. All stores are operated in a classic employee manner.