Action enters Czech Republic and strengthens its supply chain operations

Maxime Delacour
Senior Retail Analyst
@RetailAnalysis

Date : 02 September 2020

On 27 August, variety discounter Action opened its first two stores in Czech Republic. It now operates in eight countries in Europe, with new market entries potentially following in 2021.  On 1 September it also opened its second import hub, at Wroclaw in Poland, strengthening its supply chain operations in central Europe.

Eighth market entry

The COVID-19 pandemic has only slowed the expansion of the variety discounter for a short time. In early summer 2020, Action’s CEO, Sander van der Laan, said the retailer was recovering at an unexpected pace following lockdown measures. On 27 August, Action opened its first two stores in the Czech Republic in the cities of Hradec Kralove and Kladno (east and west of capital city Prague). Three more stores will open by 10 September, aligned with the discounter’s current fast expansion strategy in Europe, which should see it get close to 1,600 stores by the end of 2020.

The standard model is being rolled out in the country: 6,000 products offered at low prices including 1,500 at a price point below CZK25 (€1). The assortment includes 14 non-grocery and grocery categories.

Van der Laan said: “The Czech Republic is a very interesting country for us. Not only is it close to existing markets and can easily be integrated into our supply chain. It’s an economically strong country with a good infrastructure and Czech customers tend to be cost-conscious, whilst appreciating good quality products. That is why we believe that Czech customers will embrace our concept with our low prices and Action’s surprising and dynamic product range.

Source: Action (LinkedIn)

 

New distribution operations to support the growth in Central Europe

A new distribution centre (DC) will open in 2020 in Bratislava, Slovakia, to support the growth in central Europe. This should enable the discounter to open new stores in Czech Republic and Austria. But more importantly, the DC is strategically located in central Europe and could support the opening of stores in Slovakia and potentially in Hungary in the medium term.

On 1 September, a new import hub opened in Wroclaw, Poland. As with the other, which is in Marseille, France, the hub will receive containers from Asia. Containers will arrive through the harbour of Gdansk, in the north of the country. It will supply goods to the different distribution centres in Central and Eastern Europe.

Action’s operations across Europe as of September 2020

Source: IGD Research

 

Looking for more insight?

Retail Analysis subscribers can access our overview of the strategies and latest development of Action here