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Can I get broadband without a landline? How good are people in your job at saving into a pension? Money Morals: What should I charge a friend to rent my spare room? Should I pay off my student loan before applying for a mortgage? The low slung concrete block in the corner of Bratislava’s Kamenne Namestie square is an ugly reminder of the building’s past life under Cmmunist control. But the words ‘Obchodne domy Tesco’ or ‘in association with Tesco’ is a public indication of the department store’s capitalist future. Situated in one of the most prosperous areas of Slovakia, the three-storey outlet is one of 11 department stores owned and run by Tesco.
The My stores have somehow managed to slip under the radar of most in the retail world – never referred to in the annual update, and forgotten by the analyst community, they are Tesco’s covert consumer goods chain. Britain’s biggest grocer bought My back in 1996 to catapult it into the rapidly growing Central European market – part of a grand scheme to expand its international footprint. Complete with archetypal perfume hall, ladies wear, youth fashions, toys and a sprawling food hall, My Bratislava is a full service department store and it is at the heart of Tesco’s plans for Central Europe. The lessons learnt in clothing, electronics and toys at this city centre site are being fed back to Tesco headquarters in Cheshunt, disseminated and applied to hypermarkets across its network. This was our launch pad for the region 15 years ago,’ said Trevor Masters, Tesco’s European boss. It has helped establish the brand in the City centre and has a knockon effect at our supermarkets at the weekends.
We also bring learnings from the department store into the hypermarkets. With the UK and other developed markets coming under increased pressure from the rising cost of ingredients and hard-up shoppers spending less on their supermarket shop, Tesco’s focus on growth has moved eastwards. In November Tesco revealed ambitious plans to double store space in central and eastern Europe as the world’s third largest retailer battles America’s Wal-Mart and France’s Carrefour for international growth. 942 stores in Slovakia, Poland, Czech Republic, Hungary and also Turkey and wants to increase selling space to 44. 6bn in annual sales and with a combined population of 63m is similar in size to the UK in terms of shoppers. Masters has a two pronged strategy for growing the business.
The first is to introduce multi-formats such as smaller Express stores and bigger Extras and services that have established Tesco as the market leader in the UK. The second is to cut unnecessary costs duplicated in each country. Almost a year ago Tesco introduced its Extra format in Poland, Slovakia, Hungary and Czech. Open 24 hours a day with fresh meat, fish and bakery counters it also offers opticians, pharmacy, and mobile phone shops with each store posting double digit underlying growth in a market where grocery sales have been flat. Tesco Mobile was launched in 2010 – the biggest alternative to Orange, T-com and O2 – it is now in profit.