Interview with Chairman of Plaček Group: “I foresee franchising our model to France, Belgium or Sweden in the near future”

At a time when many pet parents are thinking twice before making purchases, pet retailers around the world need to adapt to the new circumstances. For Plaček Group – which operates the retail formats Super Zoo in both the Czech Republic and Slovakia, Dino Zoo in Latvia, Kakadu Zoo in Poland and Zoo Market in the Czech Republic – the answer is to innovate and expand. But how far does the company want to go? Industry veteran and Founder Dušan Plaček sat down with PETS International to share his ideas.

You have nearly 40 years of experience in the pet business. After all the recent disruptions, is the pet industry still as resilient as everyone thought?

I’ve been in the business since 1989 and I’ve lived through a lot of different crises. I must say that up until today the pet business has always been strong, at least in our home markets of the Czech Republic and Slovakia. But the combination of COVID, the war in Ukraine and inflation is a challenging one.

What’s going to be the main challenge for Plaček Group in 2024?

This year we have mainly been focusing on pricing and inflation, and we realize that prices will not return to the same pre-war levels anytime soon. Our challenge for 2024 is to be even more efficient and to reduce costs where possible. We see that our customers are anxious about the future, and although they still have money, they are less willing to spend it. Because of that, we expect the purchasing power among our customers to decline slightly next year.

How is this impacting the customer journey in your stores?

Today, our customers take a little bit more time to think whether they really need the products or not, so their rate of spending has slowed somewhat. This makes things more challenging for our sales staff. On the other hand, a percentage of Eastern European pet parents – especially dog owners – are keen to keep buying the same quality of products as before; they are not willing to compromise.

To what extent does less purchasing power require you to adapt your product offering in line with new consumer demands?

As a retailer, you change your portfolio regularly and, in our case, we are increasingly moving toward our own private label brands. However, we have great partnerships with some of the big manufacturers and we still want to support them.

How are you being affected by competition from supermarkets and e-commerce giants?

We are currently winning more customers from the grocery retailers, so this is a positive trend. E-commerce giants are the biggest competitors for us today, but our omnichannel strategy has helped us to compete successfully. Pet retailers with a combination of e-commerce and bricks-and-mortar stores will be the winners.

How fast are you expanding?

We open a new store almost every week. We have around 370 stores right now, and we hope to achieve 400 new locations by the second half of 2024. It depends partly on the speed with which developers build new retail parks, but this is the plan and we believe it is very realistic as of today.

How is this expansion going to impact your logistics?

If you are going to build 1,000 stores in 10 years, then you need to be sure that you have the right products in the right quantities. But it’s a real challenge to achieve high-quality logistics support for the supply chain to ensure product availability. In the past, we had buffer warehouses in each country, but we are now centralizing everything in Poděbrady, which is 60 km from Prague. We already had a 20,000 sqm warehouse there and we just expanded it with an additional 10,000 sqm. We’ve invested €7.5 million in this new warehouse and it should now meet our needs for at least the next 7 years.

And what about reaching new markets?

We are present in the Czech Republic, Slovakia, Poland and Latvia, and we plan to continue to focus on these countries in the coming years. However, because the Super Zoo concept is interesting and there have been some positive reactions from Western Europe, I can imagine developing franchise partnerships for countries like France, Belgium or Sweden in the near future.

In September, we also opened 2 test stores just inside the Czech border: in Kraslice (near Germany) and Hatě (near Austria). The idea is to gauge how consumers in the German-speaking countries react to our concept and our products, and so far the response has been overwhelming.

You launched a few 24/7 stores a while ago. What are the benefits of this concept?

We opened our pilot Super Zoo store in Týn nad Vltavou a year ago. Since then, we have added 2 more locations: a 500 sqm store in Pardubice Fáblovka, and a 565 sqm store in Brno Lesná, both in the Czech Republic.

Thanks to the advanced technology in the stores, firstly customers can visit at any time and make purchases using just their smartphone. Secondly, shoppers can use the technology if there are long lines at the regular checkouts during opening hours. Thirdly, it allows us to optimize our use of labor. For example, if the store is busy with customers we can deploy more sales associates there, and if traffic is low we can ‘close’ the store while still offering the option of self-service purchases.

How do you see this concept evolving in the near future?

We’re still in the testing phase, but we will probably implement this concept in 10 new stores in the coming months. As a specialty retailer, we want to offer good service and advice through our staff, but at the same time we want to offer speed to customers who are in a hurry.