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MARKETING STUDY SUGGESTS THAT SLOVAK HYPERMARKET BOOM IS DRIVING GROWTH IN CONSUMER SATISFACTION

Slovakia closes shopping gap with Czech Republic

WHILE Slovakia has lagged behind the neighbouring Czech Republic in the development of hypermarkets and shopping centres, a recent marketing study suggests the gap is closing fast, and that retail outlets opening in the country are applying lessons learned in other post-communist states.
The number of Slovak hypermarkets - huge shops selling everything from clothes to home appliances to electronics to groceries - has grown dramatically, from the first Tesco hypermarket opened in 1999 to 17 outlets by the beginning of 2002.
"In 1999, the Czech Republic had 25 times more hypermarkets than Slovakia. A year later the hypermarket wave also came to us and there were only seven times more [outlets in the Czech Republic than in Slovakia]," said Tomáš Drtina from the Incoma marketing research firm that prepared the study.


BRATISLAVA'S Polus City Center is a magnet for shoppers at weekends.
photo: Ján Svrček

WHILE Slovakia has lagged behind the neighbouring Czech Republic in the development of hypermarkets and shopping centres, a recent marketing study suggests the gap is closing fast, and that retail outlets opening in the country are applying lessons learned in other post-communist states.

The number of Slovak hypermarkets - huge shops selling everything from clothes to home appliances to electronics to groceries - has grown dramatically, from the first Tesco hypermarket opened in 1999 to 17 outlets by the beginning of 2002.

"In 1999, the Czech Republic had 25 times more hypermarkets than Slovakia. A year later the hypermarket wave also came to us and there were only seven times more [outlets in the Czech Republic than in Slovakia]," said Tomáš Drtina from the Incoma marketing research firm that prepared the study.

"This year, the number of hypermarkets in the Czech Republic will be only three and a half times higher than in Slovakia," said Drtina.

Influencing the growth here, he explained, is an already concentrated Czech market, where foreign-owned retail chains make up 80 per cent of the country's top 50 firms in turnover. In Slovakia, the figure is only 43 per cent.

Many of the large retailers active in the Czech Republic are looking to Slovakia as the Czech boom cools. Moreover, says the study, "chains have tested successful concepts in the Czech Republic and are developing them in Slovakia."

The Dutch-owned Ahold group, for example, has the second-largest turnover of international retail chains in the Czech Republic but is not among the top 50 in Slovakia.

However, on November 28, Ahold opened its 11th Slovak Hypernova outlet in the eastern town of Spišská Nová Ves and plans to expand to 13 hypermarkets by the end of the year.

Ahold has also announced it will be creating a new organisation in Prague to manage over 400 facilities in Slovakia, Poland and the Czech Republic.

"Those who are strong in the Czech Republic will probably soon be very strong here as well," said Drtina.

Along with the number of retail outlets, explained Lívia Franková from the GfK market research agency, consumer satisfaction with shopping facilities and prices in Slovakia has also been steadily rising over the past few years.

While consumer price satisfaction jumped in the Czech Republic in 1999 as the spread of hypermarkets brought prices down, the growth in Slovakia has been slower, but steady (see chart, page 5).

Notwithstanding, Franková said, different conditions in the two countries mean that it is difficult to explain the difference or predict how consumer satisfaction with prices will develop in Slovakia.

"Hypothetically, [consumer price satisfaction] could increase in the future along with the number of competitors, but it is a question of further research.

"It may not happen in the next year because of the economic precautions of the Slovak government," said Franková.

One thing that is clear, however, is that hypermarkets are changing the way Slovaks shop.

While several years ago it was impossible to shop in the evenings or on Sundays outside the country's biggest cities, hypermarkets that open late are now anchoring the new shopping centres and malls springing up throughout Slovakia, attracting throngs of visitors, particularly on weekends.

However, say marketers, it takes more than a hypermarket to make a successful mall.

One of the most popular Slovak malls, said Franková, is Bratislava's Polus City Center. In a recent study of shopping habits among Bratislava residents, over 76 per cent of respondents said they had visited Polus in the last six months, the vast majority of whom also said they had bought something.

"Customers at Polus value the whole complex - not just the shops but cinema, the bowling alley and other entertainment options, as well as the central location," explained Franková, adding that the most common reason people gave for going to Polus was personal or business meetings.

In contrast, the Aupark shopping centre in Bratislava's Petržalka district has been welcomed far less warmly by the capital's residents. Just over 55 per cent of respondents said they had visited Aupark, and 15 per cent said they visited but had not bought anything.

"Consumers don't give Aupark as high a value, [but see it] as cold and impersonal - not as trendy as Polus," said Franková, adding that high prices there were another consumer complaint.

However, developers and retailers think the market in Slovakia is far from saturated and that further hypermarket and shopping centre projects will continue.

"We are lagging 20 years behind Western Europe, and if you look at the way the market grew in those countries, we are still very underdeveloped," said Sándor Dejman, chairman of the Hungarian-Canadian TriGranit Development Corporation, which constructed the Polus shopping mall.

"For those who build high-quality projects there is no threat. I believe that development should really be accelerated, with a quality that will still be valid in 10 or 20 years' time," he said.

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