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Slovakia: Discount stores are more successful than anytime before

Increasingly more households make their shopping in discount stores

Bratislava, the 23rd of March 2005 – According to the results of the continuous survey Consumer Tracking /Household Panel of GfK Slovakia, which was carried out in the second half-year 2004 on the sample of 1500 households, discount stores are more successful than anytime before and they have ceased to be players on the secondary market. In fact, they appeal to a huge number of customers
In spite of the fact that supermarkets are still the most preferred type of outlet in the Central and East Europe, within the framework of European countries, discounts belong among the strongest type of retail channels. The greatest growth has been registered in a recent past.
Discounts‘shares differ according to the countries but the trend of their growth is evident everywhere through the increasing number of outlets. It isn‘t only the outlet expansion that is contributing to their success. Discounts have been growing also due to revenues growth in the individual outlets.
The economic environments of many countries support this growth. Lidl and Aldi corporations are the leaders of discount expansion trend, which is generally (with smaller exceptions) connected with growing number of shoppers, rising frequency (discounts are being visited more and more often), and intensity (more money is being spent in discounts).
Number of discount stores has doubled since 1991, and Penny and Plus belong among the other well-known players in the Central Europe.
Within the scope of European countries, discounts are most frequently represented in Germany (30,7%) and Spain (17%), on the contrary they are least represented in Russia (3,9%) and Switzerland (4,2%).

Lidl discount chain’s entry to the Slovak market can be qualified as the most significant event in the retail industry in the last year. Shortly after entering the market, Lidl worked through to the top ten retail chains. It thus filled an empty space on the Slovak market, where the discount market had been virtually non-existent. Discount outlets acquire their customers mainly by attractive low prices and easier accessibility to customer, compared to hypermarkets.
We can expect that the relatively steady state of Slovak retail business is just temporary and with entries of other discounts in 2005 some significant changes will occur again. Central and Eastern Europe will be attractive for the other discounts and that is the reason why increase in competitive contest is definitely going to bring its effect on the Slovak retail market.

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