ESM: European Supermarket Magazine is proud to unveil 'The A-Z of Retail', a new subscriber-only series that offers a deep analysis of the retailers, suppliers and individuals making the news each week. Today: Z is for Żabka.
With the introduction of the Polish government's ban on Sunday trading, the country's shoppers have been left somewhat out in the open, unsure which retailers they can still turn to on this mandated ‘day of rest’.
The last two Sundays have already seen the new legislation in effect, and by 2020, the trading ban is expected to be extended from the current two Sundays a month, to almost the whole year.
The legislation is mainly targeted at big international retailers, which dominate. the fiercely-competitive Polish retail market, but its implementation has left many homegrown names in a legal grey area.
Polish convenience franchise Żabka, however, has adapted to the new legislation with a laissez-faire approach.
Żabka, which is Polish for 'little frog', was founded in 1998, and owns the largest network of convenience stores in the country, with some 4,500 outlets.
The retailer has decided that rather than forcing its franchisees to close their businesses, it left it up to the individual store owners to decide whether (and for how long) they want to remain open, Gazeta Pomorska reported.
Local reports indicate that some Żabka outlets have opted to remain open for a few hours on Sundays, while others have closed completely.
Dynamic Convenience
The convenience channel is among the fastest growing retail channels in Poland, due to its proximity to customers, according to a recent report by Euromonitor International.
The competitive nature of Poland’s retail sector is also leading many smaller, independent retailers - which still dominate the retail landscape - to join these largely franchise-driven operations.
Just over one year ago, Żabka’s owner, Mid Europa Partners, sold the retail group to a fund controlled by American private equity fund CVC Capital Partners, which has outlined its intention to grow the business significantly in the coming years.
"Żabka is one of the clear market leaders in the modern convenience segment, with a high-quality business model and a talented leadership team,” Krzysztof Krawczyk, head of CVC Poland said at the time of the acquisition.
“We look forward to working with management as we continue to capitalise on growing market opportunities, enhance the existing store network and in the process create an international benchmark for modern convenience offering."
International Benchmark
Setting an 'international benchmark' is no easy feat in a market where several European heavyweights are vying for a chance to take control, but Żabka president Tomasz Suchański appears to be bullish about the opportunity.
"We are delighted to join the CVC family, with its strong track record globally in building great businesses in partnership with stakeholders. Their retail expertise and understanding of the local Polish market will be invaluable to us as we enter the next phase of our development."
As the government clamps down on store opening hours, Żabka could be well-positioned to up its game and see off intrusions from rivals such as Auchan or Carrefour. Its format has proven to be appealing to independent grocers, with the company eager to grant each of its franchisees a certain degree of autonomy.
While much of the focus on recent years has been on the major international names setting up shop in Poland's busy retail landscape, an emerging domestic player could be making headlines in years to come.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Kevin Duggan. Click subscribe to sign up to ESM: The European Supermarket Magazine.
