Real gets Geant

The Real supermarket chain has taken over all 19 Geant hypermarkets, at a cost of EUR 224 (zł.861) million. As a result of the deal, the number of employees on Real's payroll in Poland will rise to 13,400. Including the new Geant stores, Real currently owns 49 hypermarkets in Poland.

Real, which is part of the Metro Group and whose portfolio also includes Makro Cash & Carry, Media Markt and Saturn, predicts that its turnover will reach zł.1 billion. "The consolidation of Poland's retail market is an ongoing process," said Martin Ender, the president of Real Poland, adding: "We would like to reach 30 percent of the 'big-retailers' market and 10 percent of the total retail market in Poland."

The company plans five phases of rebranding the Geant shops, and the whole process should be completed by the end of March 2007. The cost of rebranding the hypermarkets is estimated at around zł.500-800,000 each. "The purchase will have an impact on the company's financial results," said Ender. "A negative influence is predicted this year, however next year will be positive."

Ender said the company plans to reduce the retail space of new hypermarkets and that talks with GE Real Estate, which owns Real's properties, has already begun. The company says that the optimal retail space for each Geant hypermarket should amount to between 8,000-9,000 sqm.

The number of employees at the stores is expected to remain steady as Real does not predict any job cuts. However, employment structures may be modified so some personnel changes can be expected.

Geant's customer loyalty program will be kept on until the first quarter of 2007 and then it will be extended to all Real hypermarkets.

In addition Ender announced that from the beginning of 2007, Sigma Bank will be Real hypermarket's customer credit-card provider. As a result, an agreement with Lukas Bank, the previous provider, will be terminated.

Currently, Geant possesses two shop brands. The first - the Geant brand - the company plans to sell completely and the second, the Leader Price brand, will operate until the end of March 2007, and then be replaced by a new brand called Fine Food.

Ender also said that the company does not plan to develop smaller-format stores, at least for the next two years, and that hypermarkets will continue to be its main focus.