The year 1997: The first instalment of the Harry Potter series is released in London and the clone sheep Dolly is presented to the public in Scotland. In the same year, PENNY opened its first stores in the Czech Republic. To mark its 25th anniversary, we spoke to Jens Krieger, managing director of PENNY Czech Republic.
one: Over the past 25 years, PENNY has expanded from zero to 400 stores in the Czech Republic. Why do Czech people like shopping at PENNY?
Jens Krieger: The answer is partly in the question. With more than 400 shops, we have the broadest network on the Czech market. That's significantly more than any of our competitors. We are practically everywhere. Our customers have short distances to us to shop quickly and conveniently. As part of our expansion activities, we are not only focussing on large cities, but also on small towns with 3,000 to 5,000 inhabitants.
After 25 years, we are proud to say that we are the largest discounter in the Czech Republic and are gaining customers. This means that our customers can find good quality goods at low prices and the format of our shops is such that they can quickly buy everything they need every day. This strategy is proving to be the right one, especially in the current economically challenging times, as customers are paying more attention to price than ever before.
one: Looking back: How has shopping in the Czech Republic changed over the years?
Jens Krieger : Shopping at PENNY has changed in many aspects. In the 1990s, when we entered the market, the Czech Republic was dominated by classic discounters. It was enough to display the goods on pallets - without any kind of shopping experience. However, the market has changed, as has customer behaviour and preferences. We have adapted our range to these changes. In the last six years in particular, we have modernised the shops and switched to the market hall concept. This is reflected in a higher-quality shopping ambience, new customer guidance and brighter stores.
We are focussing on more fresh food and offering a wider range of fresh fruit, vegetables and baked goods in our shops. We also offer organic products, lactose- and gluten-free products and plant-based meat alternatives. We also supplement our range with so-called theme weeks, in which we offer products with a connection to Italy, America and Asia as well as XXL packaging formats or an exclusive "Selection" selection at Easter and Christmas.
Nevertheless, we will not change our efficiency, productivity and profitability criteria. We are a discounter, which means that we always want to offer our customers a better price-quality ratio compared to the competition. That's our DNA and we're sticking to it.
one: How does shopping in the Czech Republic differ from other European countries?
Jens Krieger: Together with Slovakia, the Czech Republic has the highest proportion of special offers in Europe, even in the world. On average, it's around 55 percent, with the proportion of promotions in neighbouring countries hovering around 20 percent.
There were many competitors in the Czech Republic in the 1990s. During the economic transformation, practically all retailers came here and the phenomenon of relatively high sales prices and very low promotional prices emerged. To this day, Czech customers are used to this and act accordingly on a daily basis.
one: Just in time for its 25th anniversary, PENNY Czech Republic will complete the modernisation of its store network and open 15 new stores. What characterises a PENNY store in the Czech Republic today?
Jens Krieger: PENNY is number one on the market in terms of the number of shops and we want to continue to consolidate this position. That's why we open an average of 10 to 15 new shops every year. We want to maintain this pace in the coming years. To enable us to expand our store network at this rate, we are planning to build two new logistics centres by 2028.
We are not only focusing on expansion, modernisation and the installation of economical technologies. We are also optimising our product range step by step. In doing so, we are increasing the proportion of our own brands. Customers now recognise that own brands are of good quality and significantly cheaper than branded products. Our goal is to increase the share of private labels in the overall range to 50 per cent by 2025.
one: Sustainability plays an important role at PENNY, with intelligent refrigeration technology, durable materials and modern LED lighting. You also demonstrated in a store in the Czech Republic how empty the shelves are when there are no more bees. What significance does Sustainability have in the Czech Republic in general and for PENNY in particular?
Jens Krieger: Sustainability and social responsibility are playing an increasingly important role in our decision-making. That is why they have become an inseparable part of our retail strategy. Wherever we operate, we want to be a good neighbour. This means that we not only want our customers to enjoy shopping with us and feel comfortable with us, we also want to make a contribution to the people and nature in the neighbourhood, i.e. in the places where we operate. That's why we install environmentally friendly technologies in our shops. We regularly take part in nationwide cleaning activities, plant trees, support sporting activities for children in the regions and also look after senior citizens.
We have our own beehives in all logistics centres, and a few weeks ago we raised awareness of the importance of bees for food production at a major event. I am pleased that this event, supported by the Czech Minister of Agriculture, Zdeněk Nekula, who is a beekeeper himself, was very successful and received a lot of attention and positive reviews in the Czech media and among the general public.
one: In the course of your career, you have moved from Plus Czech Republic to PENNY Hungary and back to the Czech Republic. What surprised you most on your return?
Jens Krieger: I like Prague in particular and the Czech Republic in general, so the return was very pleasant for me. With great commitment from all colleagues and employees, it was easy to successfully continue the good work we had started here. We rebranded all shops with the new, friendly "PENNY Punkt" logo. At the same time, we are completing the modernisation of the entire store network to the market hall concept this year and are pleased that PENNY Czech Republic is steadily gaining in customer perception and developing positively. With a wide range of Czech food products, we are a reliable and good neighbour close to our customers.
PENNY Czech Republic
PENNY operates over 400 shops and five logistics centres in the Czech Republic. More than 6,000 employees work there. in 2020, the company generated revenue of 1.75 billion euros. One of the most significant milestones was the acquisition of the Plus retail chain with its 146 shops in 2008. in 2017, PENNY began modernising its network, which is due to be completed this year.
The company also opens new shops every year. in 2020 and 2021, a total of 16 new stores were opened, with a further 15 planned for this year. The number of PENNY stores passed the 400 mark at the beginning of this year. At the same time, PENNY celebrated its 25th anniversary in the Czech market in 2022.
+++ ENGLISH VERSION +++
1997 saw the release of the first of the Harry Potter movies in London and the world was introduced to Dolly the cloned sheep in Scotland. It was also the year in which PENNY opened its first store in the Czech Republic. To mark the 25th anniversary, we spoke to Jens Krieger, Managing Director of PENNY Czech Republic.
one: Over the last 25 years, PENNY has expanded from zero stores in the Czech Republic to the 400 it operates today. Why do the Czechs enjoy shopping at PENNY so much?
Jens Krieger: Your question includes part of the answer. With over 400 stores, we have the largest network in the Czech market and significantly more than some of our competitors. We are pretty much everywhere, which means our customers can simply stop by one of our stores to shop quickly and economically. The primary focus of our expansion programme is to grow our presence in smaller towns of 3,000 to 5,000 inhabitants, rather than in major cities.
After 25 years, we are proud to say that we are the biggest discounter in the Czech Republic and are still attracting new customers. That's because PENNY customers find low-cost, high-quality products in our stores, which are designed so that they can quickly buy whatever they need every day. This strategy is proving particularly effective in today's challenging economic climate, as customers are paying more attention to prices than ever before.
one: Looking back, how has shopping changed in the Czech Republic over the years?
Jens Krieger: Shopping at PENNY has changed in a number of ways. When we entered the Czech market in the 1990s, it was dominated by conventional discounters, and products were simply put out on pallets without any kind of shopping experience. However, the market has changed - and so have customer behaviour and tastes. We have adapted our business in line with these changes. In the last six years in particular, we have updated our stores and moved to a market hall approach, which is characterised by a more sophisticated shopping environment, new customer traffic flows and lighter, brighter stores.
We are concentrating on more fresh food and sell a wider range of fresh fruit, vegetables and pastries in our stores. In addition, we offer organic, lactose-free and gluten-free products as well as plant-based meat alternatives. We are also expanding our range by incorporating themed weeks to showcase products associated with Italian, US and Asian cuisines, as well as XXL packs and exclusive Easter and Christmas selections.
However, we will remain true to our fundamental principles of efficiency, productivity and profitability. We are a discounter, which means that our aim is to always provide our customers with a better value for their money than the competition. It's in our DNA, and we are sticking to it.
one: How is shopping in the Czech Republic different to other European countries?
Jens Krieger: Along with Slovakia, the Czech Republic has more promotions than anywhere else in Europe - or indeed the rest of the world. This averages out at about 55 percent of products sold, while in neighbouring countries it is about 20 percent.
Competition in the Czech Republic was extremely fierce in the 1990s, and virtually every retailer set up shop here during the country's economic transformation, leading to relatively high retail prices with very low promotional prices. Czech customers are still accustomed to this and act accordingly in their daily routines.
one: PENNY Czech Republic will complete the modernisation of its store network and open 15 new stores in time for its 25th anniversary. What characterises a PENNY store in the Czech Republic today?
Jens Krieger: In terms of store numbers, PENNY is the biggest retailer in the market, which is a position we intend to consolidate. That's why we are opening 10 to 15 new stores on average each year. And we want to maintain this pace in the years to come. In order to continue expanding our network, we are planning to build two new logistic centres by 2028.
Our focus is not solely on growth, modernisation or the installation of efficient technologies. We are also systematically optimising our range, which includes increasing the proportion of our private label brands in our stores. Customers now recognise that our in-house brands are good quality and significantly cheaper than the name brand equivalents. We aim to increase the proportion of private label goods across the entire product range to 50 per cent by 2025.
one: At PENNY, sustainability plays a significant role, with intelligent refrigeration technology, durable materials and the latest LED lighting systems. In addition, you used a store in the Czech Republic to illustrate just how empty the shelves would be in a world without bees. How important is sustainability in the Czech Republic in general and for PENNY in particular?
Jens Krieger: Sustainability and social responsibility play an increasingly important role in our decision-making, which is why they form an intrinsic part of our commercial strategy. We want to be a good neighbour wherever we operate. This not only means wanting our customers to enjoy shopping with us and feel at home in our stores; it also means making a positive contribution to the local community and the environment in the places where we have stores. We are therefore installing environmentally friendly technology across our stores. We regularly participate in nationwide clean-up campaigns, we plant trees, we support children's sport in the regions, and we also take care of the elderly.
All of our logistics centres have their own beehives, and a few weeks ago, we were involved in a large-scale event to raise awareness of the importance of bees in food production. I am delighted by the huge success of this event, which was supported by the Czech Minister of Agriculture, Zdeněk Nekula, himself a beekeeper, and by the attention and positive reception it received in the Czech media and among the general public.
one: In the course of your career, you moved from Plus Czech Republic to PENNY Hungary and back to the Czech Republic. What surprised you the most when you returned?
Jens Krieger: I love Prague in particular and the Czech Republic in general, and it was great to return. Thanks to the huge dedication of all our colleagues and employees, it was easy to successfully continue the good work that had been started here. We have been rebranding all stores with the new, friendly PENNY logo. We are also on track to finish the upgrade programme to turn all stores into market halls this year. We are delighted that consumer perception of PENNY Czech Republic continues to steadily rise and that the brand is enjoying positive growth. With our wide range of Czech produce, we are close to our customers and a good, reliable neighbour.
PENNY operates over 400 stores and five logistics centres in the Czech Republic. More than 6,000 employees work there. In 2020, a turnover of 1.75 billion euros was achieved. One of the most important milestones in 2008 was the takeover of the Plus retail chain with its 146 stores. In 2017, PENNY started modernising its network, which is due to be completed this year.
The company also opens new branches every year. In 2020 and 2021 there were a total of 16 new stores, and another 15 are planned for this year. The number of PENNY stores passed the 400 mark at the beginning of this year. At the same time, PENNY celebrated its 25th company anniversary in the Czech market in 2022.