UK retailer Iceland arrives in Prague, hoping for warm welcome on Czech frozen food market
The UK frozen food retailer Iceland recently opened its first store in Prague, its third location in the Czech Republic. The popular chain wants Czechs to acquire a taste for its frozen staples; if they do, Iceland has big plans for its Czech operation, with an appetite to expand to other countries in the region as well.
“The interest has been extraordinary. If you look around the store, you see that our frozen products are different from those offered by other chains. They are all made in the UK, and we also have some Czech stuff, too. So the interest has been great, and the most popular products are sweets – frozen cakes.”
The 300-square metre store, located just off the city’s upscale Vinohrady district, features some of Iceland’s popular dishes, from Indian curry and Chinese rice and noodle mixes to pizza and lasagne. It also offers its Czech customers something more familiar: frozen bramboráky, or potato pancakes, fried cheese, and other Czech favourites. I asked some of the patrons about what they thought of the store.
“I’m looking at these fried mushrooms on garlic. I’m not sure if I’ll get it. I can’t really tell you what I make of all this, it’s only my first time here. But many people come here, and I hear they quite like it.”
At the Chinese frozen food box, I approached a young couple in search of an easy dinner option.
“We are quite busy today and we are going out, so we are looking for something quick. We saw the store from the bus. But we’ll see if we go for it in the end.”
And this lady says she just came across the store while running her errands.
“All in all, when you look at the prices, it seems quite good, given the fact it’s frozen food that you have ready in a moment. But I just want to have a look before I decide if I actually buy something or not. But I think I will certainly get something here.”
Iceland opened its first Czech test store in Plzeň in 2012, and a year later, another, bigger location was added in Kladno. I sat down with the retailer’s manager for the Czech Republic, Milan Růžička, to discuss Iceland’s arrival in the Czech Republic and their plans for the future. I first asked him about the choice of their locations.
“Plzeň is where our partner is based so that’s where we had the opportunity to open a store. Our expansion now is very much focused on Prague, also for logistics reasons. So we will see in the future or how we’ll distribute our stores around the Czech Republic; we do have a plan of how to proceed but our next stores will definitely be in Prague.”
Will you sell anything specifically Czech?
“Well, you have just met our chef. These days, we are looking for what specific we could sell here. We will be very keen to offer our customers what they really want, and we are known as a very innovative company. So yes, we believe we will find many products to offer to out customers?
“No, no. We were talking about this a lot, and we discussed svíčková just this morning. But everyone here likes different taste in the dish which is something you really need to consider. Also, svíčková has cream in it which is complicated to freeze. So svíčková would be difficult to produce but goulash and some other dishes, why not?”
When you spoke your plans in December, you said you were planning to open 200 stores in the Czech Republic plus another 100 in Slovakia. What is the time frame here?
“This is a long-term project. Good locations are not waiting for you and it’s a tough job to get them. We obviously have a potential to open many stores; they are usually small so technically, it’s not a problem.
“The challenge is to find a good location. And I believe that if talk again in five years’ time, we’ll be talking about at least 50 or 70 stores.”
Iceland was launched in the UK in the 1970 by Malcolm Walker. It has since become a popular supermarket chain, with around 800 locations and some 1.8 percent market share of the British food market.
Outside the UK, Iceland also operates stores in Ireland, Spain, Portugal, as well as in a number of countries in the Middle East. The Czech Republic is the firm’s testing ground in Eastern Europe, says Iceland’s international business director and son of the founder, Richard Walker.
“Our arrival in the Czech Republic was opportunity-led. We were approached by a frozen food distributor interested in launching Iceland here. In smaller ways, we actually tried in Hungary and Poland first but we decided that given the size of the Czech Republic and the local connections, it was the perfect market for us to go for. The other favourable terms of the Czech Republic are that we can focus on Prague as an area before heading elsewhere.”
You opened your first stores in Plzeň and Kladno. Have you been satisfied with their sales?
“Yes. Plzeň was really a test store; we call it half-store because it’s so small. Our first proper store was Kladno which we opened last summer. We are learning. We’ve got a lot to learn about the concept, the assortments, the locations, and so on. We are fully aware we won’t get it 100 percent right the first time. But yes, we are happy with Kladno and very happy with the Prague store, too.”
What makes you think Czechs will take to frozen food in larger numbers?
“The honest answer is we don’t know. We don’t know what the appetite will be for these types of products. But we do believe we have a very innovative range, something completely different and unique that you can’t get in other retailers. So we want to try and see what the appetite is like.”
Do you think any of the products that sell best in the UK will become popular in the Czech Republic, too?
“I hope the party food will be it. It’s really a unique thing we have in the UK, and it’s something that’s become very popular. We started off doing the party range for Christmas but now we have a range called Party All Year which is popular throughout the year for different occasions, birthdays, whatever.
“I think the curries are maybe an interesting example. The taste profiles here are different and we need to be aware of that. But because we haven’t sold these products before, it doesn’t mean we necessarily can’t sell them. It’s important to do tasting tests to show off our products to our local consumers, and maybe that will take up on it.”
Are you planning to expand to other Eastern European countries regardless of how you do in the Czech Republic, or is this a trial, and if it doesn’t work, that’ll be that for Iceland in this part of the world?
“It’s fair to say that if doesn’t work in the Czech Republic, we won’t have the appetite for opening stores throughout central Europe. However, I’m fully expecting it will work and therefore one day, I’m expecting us to be further afield.
“I lived and worked in Warsaw for three years so I know the market well, and I also believe there is an opportunity there. But we 100 percent focused on the Czech Republic at the moment.”
