Share of foreign supermarket chains on Czech retail market exceeds two thirds
The share of foreign supermarkets on the Czech retail market has exceeded two thirds, which is the highest figure among all central European countries. The overall number of small and medium-sized grocery stores in the Czech Republic in 2015 dropped by two percent compared to the previous year.
According to the head of the Czech Traditional Retail Association, Zdeněk Juračka, traditional Czech shops are facing unfair competition from foreign chains, which attract customers to massive sales events, in which they sell goods bellow their purchase price. According to Mr Juračka, the gradual reduction of small grocery stores, especially in the Czech Republic’s villages, is alarming.
Most recently, the domestic Coop chain, which owns nearly 3,000 small grocery stores around the country especially in smaller towns and villages, announced plans to close down. They are currently holding talks with municipalities and state administration about a possibility to fund the loss-making stores.
The profit margin in the domestic retail has increased by 3.4 percentage points over the past ten years. According to data from the Czech Statistics Office, the profit margin on sales increased from 20 to 23.4 percent between the years 2005 and 2015. However, retailers must cover all the other costs related to sale of their goods, such as transport and storing.
Kaufland is currently the number one on the Czech retail market, followed by Dutch chain Albert, which has recently acquired the loss-making Interspar. The British chain Tesco takes third place.
The biggest income in financial year 2014 and 2015 was posted by German chain of discount supermarkets Lidl.
The ten biggest supermarket chains in the Czech Republic post an overall profit of over 330 billion crowns, which makes about a third of the country’s retail sales, not accounting for the automotive sector.
