| on 03-01-2006 02:44
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Published in : , Misc |
by Chris Coleman 
Where can you go to buy tires, a bra and goulash in a can with one swipe of your card? Why, the hypermarket, of course. The Czech National Bank estimates that 70 percent of all annual sales are from large retailers. In the past six years, more than 125 hypermarkets have been erected, and nearly 20 went up this year alone. This is no trend that passes with the season. The march of the big box is on, and Carrefour has just bowed to the pressure, leaving Tesco, Hypernova and Kaufland in the game. Wal-Mart is waiting in the wings. But do they play by the rules? And are they more than just big boxes of convenience?
It must be said that there’s not much differentiating the stores. Hypernova’s distinguishing mark is having its food section in the middle surrounded by non-food and specialty items. Tesco wins the most garish and tacky design award with its “price-chopping” scissors everywhere. Carrefour cuts a bit above the rest with a cheese and bread selection that a Frenchman would respect. Beyond that, they aren’t much more than endless rows of “stuff” in colourful packaging under the intense halogen glare. The latest shining cube of consumer worship is Centrum Chodov that opened just last month as the largest mall in the country with 210 stores and a Hypernova. This imposing mammoth features a highway running through its belly and a spiraling roundabout to a rooftop parking lot on the fourth floor (2600 parking spaces). What I found most unusual there is a “Detský Koutek” or mini day-care centre. For a mere 29 Kc an hour, parents can leave their kids ages 3 and older and walk, worry free, to shopping bliss.
The busiest hypermarket in the whole of Europe was for some time the Carrefour in Andel. In one month in 2002, more than 550,000 customers rushed through its doors. That means an average of 1,000 customers per hour open. So it seems strange then that Carrefour C.R. was taken over by Tesco in an asset exchange for Tesco Taiwan stores. It is clear that these multinationals are in the game to dominate a market or jump ship. The largest retail chain in the nation is Dutch-owned Royal Ahold, which owns Hypernova and Albert and acquired Julius Meinl this year. The multinational developed its first hypermarket from scratch here in 1997 with the intention of expanding it to financially less-stable neighbors to the east. Tesco has not been subtle in its ambitions either. It illegally bought farming-zone land in S.E. Prague recently and, according to rumour, tossed around 20,000,000 Kc to town councilors in hopes to approve the zone transfer. A little presumptuous? But this is small beans compared with the sleeping giant of Wal-Mart, which is considering the market here.
Wal-Mart, the annual sales of which exceed the gross domestic products of 161 countries, is by far bigger than the world retailers #2 Carrefoure and #3 Ahold combined and is about to enter the Hungarian and Polish markets. But it must feel a little hesitant with its failure in Germany, the as of yet only country it has invaded in the continent. There has been a clear philosophy clash with German culture, and after aggressively entering the market in 1998, it still only has 2 percent of the market. First off, it hasn’t exactly gotten along with the well-established unions there. The policy of clerks smiling at customers had to be stopped after men thought the ladies were coming on to them, and the grocery-bagging services were dismissed because Germans didn’t want strangers handling their fruit. It lost a court case in 2003 for selling staple products like butter and milk below wholesale prices and thereby damaging competition. Amy Wyatt, a Wal-Mart spokeswoman responded with “However we still remain committed to raising the standard of living in Germany, by offering our customers the best quality products at the lowest possible prices.” That shopping mantra rings a little hollow in Central Europe, especially to their underpaid employees.
It’s easy to heap on the hypermarket criticisms: lack of community, inevitable increases in traffic, lack of local enterprise, undercutting suppliers, and poor working conditions. These are all valid concerns that motivate many with the means to buy from friendly local shops. But this is a nation with a minimum wage of about 45 Kc an hour. When 8 percent of Czechs earn less than 7,000 Kc monthly, including in rent-inflated Prague, many simply can’t afford the alternatives. Just as many must be dazzled by the spectacle. After 40 years of bleak, standardized products under communism, who wouldn’t want a 30-meter aisle full of nothing but snacks?
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