Czech Republic: Specialised Natural and Organic Retailers Achieve 30 % Market Share

The Czech retail sector has dramatically changed during the last 10 years. Large stores belonging to international supermarket chains have suddenly appeared. Between 1996 and 2001 their numbers increased from 2 to 105. Ahold (Albert, Hypernova), Rewe (Billa) and Tesco are the main foreign players. Hypermarkets have gained market share from supermarkets in the last 5 years (currently over 60 %). Since 1997, when the first hypermarket opened in the Czech Republic, they have become the most popular place for Czechs to purchase food and FMCG (fast-moving consumer goods).

Picture: Albio in Prague

The popularity of the discount shop has risen sharply since 2003. For 22 % of consumers it is the most popular place. Convenient location, favourable prices and wide selection are the most important criteria for deciding where to shop. Independent and smaller stores are losing their position in the market. In rural areas, though, the specialist retailers and street markets are still important. Multiple retailers are the most important channel for organic products in terms of volume: they have about 60 % of the market share. Tesco, Carrefour, Delvita, Globus, Big Billa and Interspar, even Kaufland discounter, offer a selection of organic products, although the range is small, with about 120 food lines at most. Tesco and Carrefour are the leaders, followed by Delvita, Globus, Interspar, Hypernova and Billa. (Picture: U Meninske brany, Brno)

Specialised natural/health food and organic food shops are the second most important channel: they comprised about 35 % of total organic food turnover in 2004. There are about 300 of these food shops in the Czech Republic, 100 of them offering a good range of organic food. Their stock of organic food varies from just a few items to several hundred, depending on the location. Those located in larger cities carry a much wider selection. The specialists are the main distribution channel for dry organic goods, and for limited amounts of fresh produce, milk products and bakery products. The largest specialist organic retailers are Albio, with three stores, and Country Life, with two stores, all in Prague. These five shops have a larger turnover in organic food than all Tesco hypermarkets combined.
There are at least another 25 specialised natural food shops selling organic products in Prague alone. In the second largest Czech city, Brno, there are 10. Fifty of the specialised shops are members of the Pro-Bio Organic Farmers Association and have a specific set of standards concerning organic food. The range of goods in Albio shops is at least 80 % organic. The big specialised shops have several hundred (500-800) organic products on sale in their outlets. (Picture: Zdravy zivot, Brno)

The specialised shops can be classified in three categories:  three Albio shops that are specialised organic shops; then  250 natural food stores and 50 health food stores. Most of the shops are independent, single shops, usually run by the owners themselves.
Most shops are in the bigger cities, where purchase power is strongest. Small shops in small towns often have  problems and can barely survive. Their organic range is very limited. (Picture: U Meninske brany, Brno)

The most important shops in the Czech Republic:

1 Albio, Prague (3 shops)
2 Country Life, Prague (2 shops)
3 Rozmaryna, Prague (plus internet shop with distribution in Prague)
4 Vitek Market, Prague
5 Bazalka, Hradec Kralove (2 shops, one with a vegetarian restaurant)
6 Natural Centrum, Jihlava (a shop with a vegetarian restaurant)
7 Zdravy zivot, Brno
8 U Meninske brany, Brno
9 Zdrava planeta, Brno

Albio in Prague is the only company which mainly concentrates on organic. The first store, with 80 m², a restaurant and an information centre, was established in 2003 by Hana Zemanova and Jan Zeman. In 2004, two further stores including their own bakery, with 100 and 150 m² were opened with 100 and 150m2. There are 50 employees. The first and main shop is in the Truhlarska Road, a small road off the main shopping area in the centre of Prague. The second store is in Dejvicka Road, a very busy street in a well-off neighbourhood. The third store is at a place called 14.října and is near a huge shopping centre, off the main road. Albio has a wide range of about 2 000 organic items. The major suppliers are Pro-Bio, Vitek Trade, bio-nebio and Lucni Udoli. The percentage of organic products in stock is 85-90 %. (see forthcoming article). 

Bazalka (Basil) is a shop in Hradec Kralove (80 km north-east of Prague). The 80 m² shop was founded in 1995 and now has six employees, including three in the kitchen. The location of the shop is off the city centre, tucked away in a block of houses. It is nevertheless one of the busiest Czech shops, with about 300 organic products, around 40 % of the total range. The major suppliers are Country Life as well as local vegetable farmers. The shop includes a restaurant, which is very busy between 11 am and 3 pm. The shop is very nicely fitted out with modern, wooden furniture, combined with steel and glass. (Picture: Zdravy zivot)
 
Zdravy zivot (Healthy Life) in the southern Czech city of Brno, the capital of the Moravia region (200 km south of Prague), was established in the year 2000 with a floor space of 100 m² (Picture). The location of the shop, that operates with five employees, is in a small shopping passage on a busy street going out of the centre of Brno. There is a wide assortment of about 4,000 food lines, mainly natural foods, with the emphasis on the macrobiotic diet. It sells only about 600 organic products, including chilled and fresh produce. The major suppliers are Country Life, DoRa, Albio, Vitek Trade, bio-nebio, Sunfood (macrobiotic products). The shop combines modern design with some rustic elements and shelves made specifically for the store. There are glass covered shelves for natural cosmetics. Zdravy zivot, the second largest organic shop in the Czech Republic, is run by a very friendly and knowledgeable family. 
 
Natural Centrum in the town Jihlava (100 km south-east of Prague) was established in 1997 and has a sales area of 60 m². Two employees manage the daily operations. The shop is located near Jihlava's main square, in a quiet, green neighbourhood. Opposite the shop is a restaurant which attracts customers mainly during lunchtime. The shop's range consists of about 320 organic products, including chilled food and some vegetables and eggs from a local farmer. The major suppliers are Country Life and some local organic farmers. About a quarter of sales are organic. The appearance of the shop is  “natural”, with wooden shelves and modern wooden furniture in the restaurant. (Picture: U Meninske brany, Brno)

Contact:

Albio
Truhlarska 20, Prague 1
Dejvicka 26, Prague 6
Námestí 14. října 17, Prague 5

Bazalka
Machova 747, Hradec Kralove

Zdravy zivot
Lidicka 75, Brno

Natural Centrum
Námesty Svobody 11, Jihlava