More retailers pull out of competitive Czech market
pull out of the highly competitive Czech Republic food market.
The German retailer, which entered the Czech market in 1992, is preparing to sell its 38 outlets by mid 2006, citing reasons of limited growth opportunities because of tough competition.
This follows the sale of stores by Carrefour and Julius Meinl to Tesco and Ahold in the last two months.
Last month Ahold acquired 53 Julius Meinl stores, with plans to operate them as Albert supermarkets, which it also operates in Slovakia and Poland - increasing the number of Albert supermarkets in the Czech Republic to approximately 250.
In September, as part of a store swapping deal with Carrefour, Tesco took 11 stores in the Czech Republic in a bid to strengthen its position in the Eastern European market.
Press officer Marlies Kalthoff said Edeka is "pulling out of the Czech Republic because we see little chance of achieving adequate growth there because of severe competition."
Boris Planer, Global Macro-Economic Manager at Planet Retail told FoodandDrinkEurope.com: "CEE food retail markets are so competitive, most are generating losses. It takes six or seven years for many retailers to make any profits. There is a lot of pressure on individual store managers to meet their targets."
Recently the levels of competition in the Czech Republic were blamed for the sale of out-of-date re-labeled produce in the leading supermarkets, including Ahold owned stores.
Random checks revealed staff had been directed by their managers to break the law, and change sell-by-dates on cheese and meat products.
The problem of re-labeling and repackaging products has been discovered in Poland, Slovakia and the Czech Republic.
Edeka's moves to reduce its presence in foreign markets will allow the company to focus its attention on developing the Spar group, which it recently acquired.
The company denies reports it is planning to withdraw from Austria, Denmark and Russia.
