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Kaufland looking for partners for the long term

German supermarket chain Kaufland recently announced that it soon plans to auction off a number of plots around Poland. We spoke to Radim Pařík, the vice-president of the board of directors of Kaufland Polska Markety, about why the company is taking this step – and, as he explains, any short term profit is the last thing on their minds.

Could you tell me something about the history of Kaufland and its involvement in the CEE region? How important are the markets in this region in your general strategy?

Radim Pařík, the vice-president of the board of directors of Kaufland Polska Markety: Kaufland is owned by the German group Schwarz and our first store was opened in Baden- Württemberg in 1984. We expanded into the CEE region in 1998 with our first Czech store, in Kladno. We are also present in Slovakia, Croatia, Bulgaria and Romania, but our biggest market outside Germany is now Poland. Now we have more than 1,230 stores in seven countries across Europe and are the leader in our segment in each market we are present in. In Poland we have more than 17,000 employees in 202 stores, three logistics centres, regional offices and a headquarters in Wroclaw. But in every region of the country we are still in the middle of our development. We see the potential to operate up to 400 Polish stores. Last year was very busy, when we opened 20 new stores. We see the Polish market as having great potential: there are 40 million people, the country keeps on developing, there is lots of investment taking place – both Polish and foreign, and living standards are rising. We are focused on every country we are active in and developing on those markets – and although not every country is as big a Poland, we can see potential in all of them. However, our current investment is not only into expansion, but is also going into refreshing existing stores, into new concepts and infrastructure. There are many multiplicators of value – it’s not all about plots and construction.

And what is your strategy at the moment, in response to the changing dynamics of the market?

So we have embarked on our strategy focused both on the customer and on development in every region of every country we are present in. This will involve the refreshment of existing stores, the introduction of new concepts and new warehousing facilities. Because of the changing concentrations of consumers, it is necessary to move our warehousing. E-commerce, for example, is one point of our strategic agenda. The model we are planning to use for e-commerce is now being trialled in Germany. We believe and indeed know that e-commerce is definitely going to come to Poland in a big way. But we are still in the testing process and maybe our eventual concepts will change for this segment.

Where are the plots that you intend to sell and what are their general features? And what kind of investor might be interested in them?

The plots we are selling neighbour our stores. They are located in Bełchatów, Bytom, Ełk, Hajnówka, Ruda Śląska, Koszalin, Legnica, Turek, Nowa Sól, Zabrze, Ząbki and Żyrardów. The size of ​​these plots is very diverse, ranging from 450 sqm to up to 3 ha. Specifically, we are looking for business partners to invest in them. The idea we are promoting for the sale is “developing your business with us”. The reason for this is that we are looking to extend our offer for our customers and this should complement our own rich offer of goods, giving our customers access to goods we don’t offer. So the plots could be the locations for individual stores or they turned into retail parks and developed together with us. We are open-minded about what could be built there, since each of the 13 plots to be auctioned has their own particular features and situations. Some have building permits in place while all have the advantage of the existing infrastructure around our stores. The type of tenant depends on the specific location, so the concept is crucial and requires an analysis of the location, of what is missing in the retail offer locally, and what could be made better. So we are looking for a complementary addition of services, to broaden and diversify the offer.

When will the auction take place and what do you plan to do with the funds raised from it?

We are planning to hold an internet auction for all 13 plots in May. Everybody can take part and is invited. The concept that is proposed by the buying parties is very important, that is, the idea for what will be built there. Not only the price is important – it is how the development will extend the offer for our customers that is the main factor. The money raised from the sale will be re-invested, for example, in buying new locations. But this project is not for earning money in the short-term, but is to create something that will work for a long time into the future. We have been building stores for 30 maybe for 50 years, and now we are looking for reliable partners to develope the business together with us for our customers for the long term, not just for 3 or 5 years.

More information: +48 32 246 05 42

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