Czech Republic flag Czech Republic: Buying and Selling

The distribution network in the Czech Republic

Evolution of the Sector
By some measures, the Czech Republic has one of the highest proportions of supermarkets and superstore space per capita in the whole of Europe. Distribution channels in the Czech Republic are similar to those in the rest of the European Union. Fast-moving consumer goods (FMCG) has experienced some consolidation, especially in the sectors with strong competition. The principal economic zones of the country are concentrated around the capital Prague and in metropolitan cities like Usti nad Labem and Plzen in the west and Brno and Ostrava in the east.

The often pronounced focus of the Czech customer on the price of food is starting to slow down as the quality of produce starts to also heavily influence consumer behaviour. Even food discounters such as Lidl and Penny Market have recognised this trend and are investing in a store concept change in order to shake off their "cheap" image. Small retailers continue to face strong competition from large and modern grocery retailers. Czech Republic ranks among countries with the highest proportion of promotional sales, while consumer expenditures on food and beverages, including spirits and tobacco, accounts for 24.3% of total household spending (USDA). In recent years, food retail groups in the Czech Republic have recognized the growing importance of private labels, which account for nearly one-fourth of value spent of packed grocery excluding fresh products. In the Prague area, numerous smaller concepts are expanding - bakeries, wine stores, coffee shops.

The performance of supermarkets in the in 2019 was marked by solid growth in terms of both value sales and number of outlets, with the main groups (including Billa, Ahold Czech Republic and Tesco Stores) investing on the improvement of their points of sale, thus increasing their combined value share at the expense of smaller supermarket chains. Czech consumers are increasingly favouring smaller store formats, including smaller supermarkets supplied with only the necessary grocery products, whereas traditional grocery retailers continue to lose both value and outlet share due to struggling rural stores, rising wage pressure, a lack of investment and lagging innovation. Moreover, traditional grocery retailers is very fragmented compared to other grocery channels. Following the COVID-19 outbreak, Euromonitor considers that many independent grocery retailers in small villages may not survive without state or municipal support, so that the Czech government is considering elevating grocery stores in underserved areas to public service status.
Internet sales have been growing at a fast pace, with a 70% increase year-on-year in 2019 for grocery online sales (FAS Prague).

Market share
The distribution structure in the Czech Republic increasingly resembles traditional western markets, with big groups dominating small local traders. In fact, until 1989, commercial distribution was under State control, but today it is entirely privatised. In 1997, hypermarkets represented only 1% of retail business while traditional businesses represented 49%. Today, the trend has completely changed and supermarkets/hypermarkets largely dominate the market, with the share of traditional traders in constant decline.

Today, the distribution market in the country is dominated by German, UK and Dutch retailers: REWE Group with the brand Billa (supermarkets) and Penny Market (discount); Schwarz Group with the brands Lidl (discount) and Kaufland (Hypermarkets); Tesco Group with hypermarkets and supermarkets; Ahold with the supermarkets and hypermarkets Albert.
In 2019, the top three retail chains Schwarz Group, Rewe, and Ahold had a 57% market share, according to USDA figures. The German group Kaufland remains the leader in hypermarkets based on both the number of outlets and value sales.

In terms of sales value, retail channels have the following shares (USDA, 2019):
- Hypermarkets: 30%
- Supermarkets: 17%
- Discounters: 24%
- Convenience: 11%
- Specialists: 5%
- Other: 13%.

Retail Sector Organisations
Czech Trade Office
Czech Ministry of Industry and Trade
Czech Confederation of Commerce and Tourism

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Latest Update: June 2022

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