The accession of the Czech Republic and Slovakia to the European Union last May 1 has not yet altered the overall market in any significant way, but it may do so in the longer term, judging from what happened previously in countries such as Spain or Portugal. On the other hand, the new status has greatly simplified the bureaucracy and the logistics.
The most important changes in Slovakia include the cancellation of a time-consuming mandatory certification process for new products that prevented bringing hot trends on store shelves on time. As a result, young customers and the more affluent consumers in Bratislava who flocked across the border to shop for fashionable models in Vienna are now expected to do more shopping at home.
The general retail environment in both countries has been changing rapidly over the last three years following the establishment of new shopping malls, the growth of general food chains and the arrival of some big specialized footwear chains from abroad such as Deichmann and Humanic. These developments have led hundreds of independent mom-and-pop shoe stores to close down. This in turn may lead to the disappearance of certain wholesalers such as Constanta, a Czech distributor who is now working with only about 100 independent shoe retailers, down from 900 two years ago.
In the Czech Republic, Bata is the market leader with 69 stores, many of which had been established by Bata in 1920s and 1930s. Reno has 48 stores in the country, and as the German-owned retailer buys footwear also for the local stores of Tesco, the UK-based mass merchant, it is also represented in chain’s 17 supermarkets and six department stores across the country. Deichmann opened four stores since entering the Czech market two years ago.
Slovakia offers more opportunities for retail chains as the market is far from being saturated. It is led by Obuv Partizanske, a Slovak chain of approximately 40 stores. Reno has two stores in Slovakia. Like in the Czech Republic, Reno’s footwear is also sold at 27 Tesco supermarkets in the country. Bata owns 13 stores in Slovakia. Deichmann is expected to open the first two stores in Bratislava by the end of this year. A 100 percent Slovak footwear manufacturer, Jaspol, runs 10 stores of its own named Sona.
Slovak-owned shoe retail chains of small size such as Danea and Imperator accompanied the arrival of sleek and popular shopping malls in Bratislava such as Polus City Center and Aupark. A ferocious battle for the space at the numerous new malls that are planned to spread across the country is widely expected.
While the retail environment is changing rapidly, the buying power of the Czech and Slovak population is still limited in comparison with their Western neighbors. According to Austrian consulting firm, RegioPlan, the average Austrian family spends €30,550 on consumer goods per year whereas a Czech family goes through with only €14,230 and a Slovak family gets by with €12,010 in the same period. The average monthly salary is €574 in the Czech Republic and €386 in Slovakia.
Spending levels vary significantly between the capital cities, Prague and Bratislava, and the underprivileged countryside, where the unemployment rate has had dramatic effects for some retailers. La Familia, a regional chain in central Slovakia, one of the poorest regions in the country, closed nine of its 14 stores two years ago after two slow seasons. However, Roman Mucka, the chain’s owner is not fazed by the looming foreign competition. He believes that the knowledge of customers’ tastes provides Slovak-owned chains with a great advantage.