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September 7th, 2008
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Grocers consolidateCustomers to miss favorite productsBy Brandon Swanson Staff Writer, The Prague Post November 22nd, 2006 issue
To hear the press tell it, the Nov. 13 sale of the Delvita brand grocery stores to the German-owned REWE Group may as well have been the sky falling. The reports had many worried their favorite products would disappear from store shelves completely. "Haagen-Dazs, extremely tasty ice cream, and varieties of great Spanish salami are going to disappear along with Delvita," wrote Miroslav Motejlek, a commentator for the Czech magazine Týden. "Delvita's grocery stores were probably the highest quality on the Czech market." Motejlek lamented that customers would be forced into "a total retail-trade Lidl-ization," a reference to Lidl, the grocery store chain known for its low prices but not much else. Delvita has been in the Czech Republic since 1991. Should shoppers fear that the departure of Delvita, which only held a 15 percent market share, will mean less choice on Czech shelves? "From a short-term perspective, yes," said Zdeněk Skála, a retail analyst with the Incoma research firm. "But from a long-term point of view, it is in the remaining retailers' best interest to offer customers whatever will attract them, which is why they will gradually shift closer to satisfying real demand." Still, REWE officials have not yet decided whether REWE will restock Delvita stores to mirror its Billa chain or adopt Delvita's reputation for a wide array of products. "This is really something we are going to have to think about in the next few months," said REWE spokeswoman Corina Tinkler. Start clearing freezer space: There is still time to horde the most desired products. REWE won't complete its purchase of Delvita until April 2007, and converting Delvita's 96 stores will take more than two years. Petr Hlavín, a 32-year-old manager at a Delvita in Prague 2, said his employees were more concerned about how secure their jobs are when Delvita officials announced they would pull out of the country. He has been with the company for 12 years. "When the management announced that the chain would be sold along with the employees, employees stopped worrying about it," he said. The buyout capped a volatile week in the grocery industry. Less than seven days earlier, the Dutch-based Ahold said it would abandon its stores in Poland and Slovakia in order to focus on its Albert and Hypernova stores in the Czech Republic. Officials say that such tectonic shifts are expected to hit the market several more times before it settles. "The current number of retailers on the Czech market tells us that we can only expect further consolidation," said Ahold spokesman Libor Kytýr. Delvita is the third major grocery chain to leave the country in 2006, following the departure of France's Carrefour and Germany's Edeka. Austria's Julius Meinl sold its 60 supermarkets to Ahold last year. In the end, fewer grocery chains will benefit customers, analysts said. "It could sound like a paradox, but this will lead to better service to various consumer groups than when there were many retailers on the market," Skála said. Petr Kašpar contributed to this report. Brandon Swanson can be reached at bswanson@praguepost.com Other articles in Business (22/11/2006):
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