11/13/2006

Ahold ditches Poland, Slovakia

The Dutch-based Ahold — which runs nearly 300 Albert and Hypernova stores throughout the country — will abandon its stores in Poland and Slovakia in order to focus its efforts on the cramped Czech market.

The move signals the company's effort to make the Czech Republic the cornerstone of its growth in Europe, the company said Nov. 6.

It is also another example of a retail company cutting its losses in countries where it is dropping market share as the Central European retail food market further consolidates.

"It is now time to concentrate all efforts on enforcing our competitive retail positions in the Czech Republic," said Johan Boeijenga, Ahold's director general for Central Europe.

The announcement came as part of a major restructuring at the company, in which it also revealed its intention to back out of the U.S. market and cut operating costs by 500 million euros ($630 million/14.2 billion Kč) by 2009. Ahold wants to sell U.S. Foodservice, which has grocery stores in Ohio, New York and Pennsylvania.

Analysts say the market is undergoing consolidation, but Ahold's departure from Poland and Slovakia does not signal internal problems.

"True, the company is leaving some markets, especially in Central Europe, but that's because it had different strategic ideas when entering these markets," says Zdeněk Skála, a retail market analyst with Incoma. "We see high competition on the Czech market, but Ahold holds a top position. I would see its place on the market as very promising."

Analysts say the days of major international grocery chains eating into domestic operators' market share are over, and that companies will now look to holding on to the markets they dominate.

"We shall operate as a major small retail player in markets where we are able to secure the No. 1 or No. 2 position, with a clear perspective on growth and maintainable development," said Ahold Account Manager Marta Vokurková.

Ahold also plans to shift its focus with its existing hypermarkets, the daily Hospodářské noviny reported Nov. 6. The paper said the company could reduce the size of some of its Hypernovas, emphasizing food sales over consumer goods and electronics.

Meanwhile, Ahold launched cash-back service in all of its 297 Albert supermarkets and Hypernova hypermarkets Nov. 7. The service is only available to ČSOB and Poštovní spořitelna clients.

The company was the first to open a supermarket in the Czech Republic, launching Mana in Jihlava, east Bohemia, in June 1991.
Source:By Brandon Swanson, praguepost.com



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