The Prague Post
http://www.aaaradiotaxi.cz/index.php?xSET=lang&xLANG=2
September 8th, 2008
Endowment Fund     Business Listings ONLINE      Reservations      Classifieds    Subscriptions
Prague accommodation
Prague Art & Antiques Prague Art Prague Antiques

Home » Archives » Business

Retailers tussle over Plus stores

Takeover of discount chain should settle upturned sector

By Victor Velek
Staff Writer, The Prague Post
January 16th, 2008 issue

Shoppers are about to lose another supermarket chain.
Germany’s Tengelmann has decided to sell its 146 Czech outlets of the discount chain Plus. Among the bidders for the stores are Tesco, Rewe, Schwarz, Aldi and Spar, according to published accounts.
The Plus sale comes as the country’s dominant supermarket firms are jockeying for position on the market in the wake of major turnover. Within the past few years, the retail chains Julius Meinl, Carrefour, Edeka and Delvita have pulled out of the country, selling their outlets to local competitors.
Talks with potential buyers for Plus have now entered the final phase, and it is “only a matter of days” before Tengelmann completes the deal, Hospodářské noviny reported Jan. 14.
The highest bids, worth 250 million euros ($367.5 million/6.5 billion Kč), have been made by Tesco and Rewe, a sum that has now reportedly been matched by Austria’s Spar, according to the newspaper.
“Spar doesn’t comment on such issues,” said Martin Hruška, head of Spar’s Czech subsidiary. The other reported bidders and Tengelmann also refused to comment on the Plus sale.
Last year the Tengelmann Group, which operates food, textile and do-it-yourself stores in Europe and the United States, sold the majority share of its German Plus chain and disposed of Plus’ operations in Spain, Poland and Portugal. Earlier this year, Plus pulled out of Greece.
Plus has been a fixture on the local market, operating since 1992, when it was one of the first newcomers to enter the country after the fall of communism. Last year was not kind to the chain, with Plus recording a loss of 47.8 million Kč; the year before, it was in the black with a net profit of 85.3 million Kč.
Plus’ retreat from the Czech Republic is a result of Tengelmann’s new strategy for Europe, rather than a result of poor local performance, said Zdeněk Skála, retail research director at Incoma Research.
But the truth is that the local retail market is overcrowded, he added.
“The number of retailers that entered the retail market in the 1990s was higher than the market could bear,” he said.
Plus suitors seek to win more space on the market, according to Skála. The bidders operating discounters, like Rewe, want to strengthen their position in that segment. The bidders operating hypermarkets, such as Tesco and Spar, want to expand to small-format retailing, he said.
Although it is widely expected that the German discount chain Aldi will appear on the market soon, overall the market is heading toward calmer waters.
“We expect a consolidation of the market, rather than other players coming in,” Skála said.

Victor Velek can be reached at vvelek@praguepost.com


Other articles in Business (16/01/2008):

Browse the Current Issue

If you enjoyed this article, why don't you subscribe to the print version!
We accept secure online transactions provided by PayPal and Moneybookers

Be the first to add a comment!


Full Name: *
City: *
E-mail: **
This comment can be published in the print version of The Prague Post
Enter the text on the right:
 visual captcha
Comment: *
* Required field. In order to be approved for display, comments must have a first and last name and a city.
** E-mails are required and will only be used for internal purposes.

Most visited in Business Listings

Hotel booking
The Prague Post Online contains a selection of articles that have been printed in
The Prague Post, a weekly newspaper published in the Czech Republic.
To subscribe to the print paper, click here.
Unauthorized reproduction is strictly prohibited.