Poland: MR. DIY in Poland targets 1,000 stores?

Discount Variety Retail Chain MR. DIY is growing in Poland, but instead of spectacular declarations, it focuses on cold calculation and selection of locations.

In an interview, Łukasz Dobrowolski, country head MR. DIY in Poland reveals why the chain does not want to copy the Malaysian model, how it approaches acquisitions and whether it really sees the potential for hundreds of stores. This is an interview about a strategy that can change the balance of power in the non-food segment.

How is MR. DIY with development in Poland?

The announcements included the numbers of 40 stores in the short term, 100 in a few years, and the potential of up to 1000 stores was assessed.

Are these large numbers?

In the long run, I am cautious about specific numbers, because 10 years is too many variables. I can confirm the direction: organic development and building accessibility on a national scale, while at the same time fine-tuning the economy. The quality of the location is a priority for us, and the scale is to be a consequence of a well-made model.

The market is growing and changing dynamically. I know from experience that long-term forecasts in retail change with the market, so I prefer to stick to the incoming data and assumed stages of development. Today, we focus on what we control: pipeline, operational standard, and store economics.

Development of the MR DIY in Poland will include shopping malls and retail parks, and in the next stages – where it makes business sense – independent locations and selected larger formats may also appear.

In the DNA of the brand from Malaysia are large supermarkets, outside Malaysia the store format is more small scale.

There is a wide range of formats in Malaysia, including larger stores. In Europe, we are developing a model tailored to local stores – in locations, with an assessment of the economics and potential of a particular location.

In Poland, decisions about the area will result from the location and cost model – we do not assume that the European market will be a copy of the Malaysian market.

Does that mean you want to be the second "Julia"?

No, it's a different concept and a different value proposition, so I wouldn't compare it directly. We do not rule out larger formats, but we approach it pragmatically: only where economics and location will justify it.

At what pace would you like to develop in the next 2-4 years? What level would be satisfactory for you in the perspective of 4-5 years?

MR DIY store development plan in Poland assumes the opening of several dozen stores every year – about 30 to 50 new locations, depending on the availability of the right places. Pace is important, but selection is equally important. We prefer to grow a little slower, but in locations that bind sales and costs in the long term. Ultimately, the pace will be at the level of the "middle tens".

Do you plan to accelerate your development through an acquisition? Are you talking about non-food concepts, of which there are a lot? Some brands, especially clothing brands, are doing worse and worse. If the spaces and locations would fit, is the owner considering such acquisitions?

We do not close ourselves to any scenario, but our actions must be characterized by strategic and financial coherence. Today, organic growth is key for us: building a portfolio of locations and scaling the operating model. If an opportunity arises that accelerates development without increasing the risks and costs of integration – we will analyze it.

For example, the cases of Carrefour, which reduces hypermarkets or closes selected stores.

This frees up a lot of space. Kaufland took advantage of Tesco's stumble.

The aforementioned situations show that the retail space market in Poland is dynamic. Our BD team is in talks with both operators and developers, and looks at each option through the prism of potential and financial conditions. It is crucial that the location and cost model fit our format.

We are open to different types of partners and different formats, as long as the economics of the project are tight. We don't do expansion "for the sake of expansion" – decisions have to be defended by sales and costs.

Does MR. DIY want to take over the Dealz chain put up for sale? But are these areas too small? Or maybe it is worth entering a new market segment, i.e. a food and industrial discounter?

We do not comment on specific market processes or potential transactions. We focus on organic development and scaling of the current model.

What do the directions of MR DIY expansion look like today? Where will you open stores and locate new locations? It can be assumed that these will be the largest cities and agglomerations, where there is the highest density of customers and where it is easiest to build brand recognition. How have you planned the development for the coming years and how will you increase the availability of the brand?

We are developing in large cities, but at the same time we want to be closer and closer to the customer, also in smaller locations – where the economy and availability of customers justify it. The example of Miłków in the Karkonosze region shows that we are not limited to the largest agglomerations. We will build brand availability through selective development of the chain and maintaining the repeatable quality of the store.

I will return once again to the declaration from over a year ago. Does the Polish market really have the potential for 1000 MR DIY stores?

Poland has great potential, but the perspective of 10 years is too long to responsibly operate with a specific number. We rely on our own analyses and on the real availability of locations. The market can change significantly even during the year, so the direction and quality of expansion is more important than one number.

Returning to even larger stores, you mentioned that they may appear. Do you already know when and where?

It is far too early for such declarations. If larger formats were to appear, it would rather be in large cities and locations with a high concentration of customers, where the economics of the project will be clearly justified. The area and format will be tailored to the market and the specific location.

So the larger stores that we can expect in the future will have up to 3,000 sqm?

Not necessarily. In Europe, we adjust the format to local real estate situations, so we don't automatically assume specific areas. There are several concepts and formats in the group, but decisions about the size of the store will be made in stages and solely based on data.

Mr. Dollar is interesting. Convenience stores "for DIYers". Could such a concept work in Poland?

At this stage, we have not yet conducted such analyses. We focus on developing the current concept and building brand recognition. We are not closing any roads in the future, but we do not want to be distracted too early.

Read more: MR. DIY in Poland: expansion plans, strategy and location market

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