Zabka Launches FreshMarket Format in Poland

Zabka, Poland’s leading convenience store chain owned by the Czech-Slovak Penta Investments fund, has launched a new format called FreshMarket.

The first store opened in Leszno at the end of March 2009.

Zabka plans to set up 15 stores in Poland this year with a target for 50 shops in 2010 and a long-term goal for 1,000 outlets.

According to the management, the Polish fmcg market is far from saturation point and there is room for new formats such as FreshMarket, with outlets between 250sq m and 400sq m.

FreshMarket: first store in Leszno

FreshMarket’s offer is positioned between the ranges of delicatessen chains and supermarkets and products have a premium proposition.

The stores offer around 7,000 skus and feature café areas serving coffee, sandwiches and pastries.

The Zabka convenience store chain was founded in 2000 and over a period of eight years has become a significant player in the retail market.

The Penta investment group acquired the chain in 2007 with a view to expansion.

The stores in the core chain have a floor area of 80sq m on average, selling mainly food and beverages.

They also offer terminal services, e.g. mobile credit top-up or payment of utilities bills.

In 2008 the company expects revenues of PLN 1.8bn (Euro 396m) and EBITDA of PLN 89m (Euro 19.6m). Penta is currently operating more than 2,000 Zabka stores in Poland, and more than 30 stores in the Czech Republic.

“We have become the most profitable company within our segment in Poland. Based on preliminary figures for 2008, our net profit has grown almost 40%,” said Jacek Rozsyk, CEO Zabka Polska.

“While in Poland it is an organic development of a well-appointed concept through a gradual growth and opening up new locations, in the Czech Republic, Zabka is a typical start-up project.”

FreshMarket: chilled foods

In the Czech market, Penta has updated and tailored the Zabka design to the market and the format was voted the retail store of the year in 2008, according to Zdenek Linhart, CEO Zabka Czech Republic.

While continuing to expand, Penta said the ongoing global financial crisis would negatively impact on retail revenues in 2009.

It estimates that earnings will stagnate, and many retail chains that have misjudged the costs of their expansion and got into debt will be under pressure in the competitive environment. However, that will create room for further consolidation of the sector.

“We are ready to take an active part in it,” said Marek Dospiva, partner at Penta.