Slovak consumers are very price-sensitive (source: Sme - V. Šimíček)
RETAIL chains in Slovakia are well aware of the importance for the domestic economy of selling local products. On the other hand, they stress that products on their shelves must have reasonable prices as Slovak consumers are very price-sensitive. The retail chains welcome campaigns supporting the purchase of local products, but say a proper definition of what constitutes Slovak food is still lacking.
The Slovak Spectator spoke with Gabriel Csollár, chairman of the board of directors of the Coop Jednota Slovensko retail cooperative, Jiří Králíček, operations director of Billa Slovensko, and Oľga Hrnčiarová, corporate affairs manager at Tesco Stores SR, about the preferences of Slovak customers and various initiatives to support purchasing of local products.
The Slovak Spectator (TSS): How do you perceive calls to increase the share of food produced in Slovakia that is sold via retail chains?
Gabriel Csollár (GC): Such calls, if they are communicated publicly, help to increase general awareness and promote Slovak products. If consumers see such an activity in the media, there is a chance that they will start to be interested in this issue and in the ideal case reassess their shopping habits. For foreign retail chains this is a necessity in order to establish themselves on the Slovak market and it is an opportunity to be perceived by customers as more ‘local’ or ‘Slovak’. For Coop Jednota this is not an issue because we are a local Slovak network of retail shops with a more-than-70-percent share of local products on the shelves of our shops.
Jiří Králíček (JK): Billa welcomes calls to increase the share of products of Slovak origin in supermarkets, as our retail chain has already been trying to do this for several years. Our efforts have resulted in us achieving a more-than-70-percent share of Slovak products when it comes to poultry, raw meat, most vegetables and fruits, fresh bakery and eggs. Overall, Slovak products represent about 55 percent of the products we sell. The primary criteria for choosing suppliers are the freshness, quality and safety of the products, but also the ability to supply required volumes at a reasonable price.
Oľga Hrnčiarová (OH): For us, the required quality and an attractive price for the customer come first. If a product meets these two attributes, then we are interested in its origin and, of course, we take pleasure in giving preference to Slovak products. We regard calls to increase the share of products of Slovak origin as very important. The sale of domestic products has a positive impact on the economy of the country – basic agricultural production, the processing industry, the base of suppliers and overall employment. It is also our primary interest to increase their share.
But we are encountering a problem given that it is not easy to define exactly what Slovak food means since an exact definition does not exist. Unfortunately, the trading system is assessed in a distorted way according to the percentage share of food on the shelves as judged by its country of origin. We believe that the share of sales is a much more important factor since this generates the added value that is positive for the economy.
TSS: How do you evaluate the interest of Slovak consumers in products of Slovak origin? Which factors influence this interest?
GC: There are more factors playing a role during the process when a customer decides where to do their shopping and what products they buy. In general price is especially important, and according to this factor many Slovak producers are not able to compete with cheaper goods from abroad. At the same time, the quality of imported goods is often insufficient, but the customer accepts this with regards to the price and the abilities of his wallet. In the case of goods with comparable quality the problem is in communication. Foreign companies operating around the globe have significantly bigger budgets for marketing and sales support. With regards to Slovak products what is especially important is the tradition, the quality tested over years, recognition, loyalty, affiliation to the region and especially the responsibility of the seller, who can particularly help in this sense by selecting Slovak products to sell. The interest of customers in these products is growing and customers realise that by purchasing these products they support themselves.
JK: We notice that origin is an important criterion for the customer when choosing the product, but not the only one. Price still remains the most important one and we also observe a stronger trend towards quality and to healthier products. However, following various campaigns in support of Slovak products, we see an increasing number of customers reading the product specifications, including the country of origin. We try to make it easier for customers by marking meat, poultry and eggs with the symbol of Slovak origin guarantee, as these are the products where customers prefer Slovak origin the most.
OH: We have been preparing various offers for our customers for a long period of time in which local suppliers participate in some way. A typical example is a product ranking in which exclusively local suppliers participate. It contains typically Slovak products: spreads, cheeses, smoked meat products, yogurts, etc. We have been constantly extending these offers and promoting them systematically because when customers know about these products, they can also reach for them because they are of Slovak provenance. This generates awareness about products on the shelves as well as a general awareness in society that it is helpful when customers purchase products from local suppliers. The media can also contribute to this to a significant extent.
TSS: In the past there have been several projects to support the sale of products of Slovak origin. How do you perceive such projects? Has your retail chain joined any of them or organised any projects to support products manufactured in Slovakia?
CG: We perceive these projects positively and as useful. There is an effort for a synergistic effect with the goal to achieve benefits for the whole of society – producer, seller, consumer, society, etc. We rank among the most successful projects the ‘Let’s Shop at Home’ and ‘Quality from Our Regions’ which Coop Jednota joined.
This is a corporate responsibility project, based on educating the customer. The aim of the project
is to educate citizens in order to provide them with basic economic knowledge, and appeal to their responsibility to the region in which they live and especially the need for them to support it, because in this way they support themselves.
For the time being we are preparing, along with the organisers of this initiative, cooperation for 2012. Apart from this project we are also developing our own activities in marking goods, in supporting regional producers by including their goods in the range offered for sale in the respective region, in communicating with customers and, last but not least, also in product marketing and sale of Slovak goods under the Coop Jednota trademark.
JK: Billa was one of three retail chains which participated last year in the Quality from Our Regions project. The project turned out to be a success, in terms of cooperation with producers, increasing customer awareness and Slovak product sales. Billa enthusiastically supported the campaign through special leaflets, as well as traditional weekly product leaflets. Our customers actively participated in the competition within the campaign. That the highest number of SMS were sent by Billa customers and that the winner was also a Billa customer were good evidence of our customers’ increased awareness of the campaign.
OH: There were a number of such projects but, alas, they did not have sufficient marketing support. If a customer does not know anything about such a project, then he will hardly identify with it. We at Tesco have had an excellent experience with the Quality from Our Regions project which we joined last year for the first time and will join again this year. This project differs from others, especially in its primarily educational character. This means that it explains to people why it is good for them to purchase local products, that they will help the economy in this way and that when the economy of the country runs well, then they will be well off too. This is the path we should all follow.
