Czech: Action enters Czech Republic with 2 stores
Updated: Sep 25, 2020
Discount Non-food Retail Chain Action (owned by PE 3i group) opened its first two stores in Hradec Kralove and Kladno, Czech Republic. This is the eighth country where the company, founded in 1993, operates. Where other companies, partly driven by the corona pandemic, are focusing more on internet sales, Action is looking very carefully at whether it can do something more online.
"Every consumer is online nowadays, corona has accelerated this and also to a broader target group", CEO Sander van der Laan says in conversation with dutch online news platform NU.nl. Even so, Action will open another 100 stores in Europe this year, of which only three in the Netherlands.
"Last week we had 11 million visitors in the stores, 6 million online. That number is increasing faster than in the stores," says Van der Laan. But you can't order anything on the website, just look. "Until now it is not necessary for us to sell stuff online. It is also damn difficult to get a product that costs € 1.50 (US $ 1.78) excluding VAT, without loss to the customer's home."
In mind it is a broad test
Until a few months ago, customers in no country could do anything on the website other than just look. "Recently we started a trial with five stores in France with click & collect and recently also with five stores in the Antwerp region", says Van der Laan.
Action was hit hard by the corona outbreak in France, Belgium, Germany and Austria in particular. There the 700 shops were closed. "In such a case click & collect can be a solution." In addition, customers order items online, it is collected and prepared for them and they can collect and pay for it at the store. "In the back of our mind, we see the tests there as a broader test."
Last year, Action's approximately 1,600 stores had a turnover of € 5 billion (US $ 5.9Bn) and an operating result of more than € 500 million (US $ 590Mn). "That is very profitable in retail," says the CEO who previously worked for Albert Heijn. (see also our post: https://www.discountretailconsulting.com/post/poland-action-poland-profitable-within-2-years-after-market-entry) "This year we will certainly be hit by the corona crisis. In those first months, we turned 50 to sometimes 75% less turnover."
Action now has 390 stores in the Netherlands, three more will be added this year. Because of the increasing retail property vacancies there is enough available. "Those are not the retail spaces that we look at. We rather fish in the same pond as discounters and supermarkets, whereby low rent, good accessibility for customers and supplies are leading."
A football looks the same in Poland as it does in France
The latter also applies to the foreign expansion, this is done from the eight European distribution centers. After the Czech Republic, the expansion drive is not over yet. "At least 5 more European countries will be added, including at least Italy next year. New countries are always cross-border countries," explains Van der Laan. After Italy, Spain, Portugal, Denmark and Switzerland will follow soon.
Action may have Dutch roots, but the bulk of the more than 1,600 stores is located across the Dutch border. "The customer is a bit different everywhere, but there is a lot of overlap in the categories and products we sell." Action, for example, sells many office supplies and do-it-yourself items.
"A hammer is the same in the Czech Republic or in the Netherlands, a football looks the same in Poland as in France. Of the 6,000 articles and 14 categories that we have in the store on average, 95 percent are completely the same in all countries." Moreover, a company with the name Action can operate anywhere.
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