Społem gets together

At the moment, 4,000 Społem outlets belong to various regional cooperatives. They are 100-percent Polish owned, and employ over 50,000 people. Last year revenues of all Społem stores amounted to zł.7 billion.

This autumn will see the consolidation of 900 Społem outlets belonging to 140 regional cooperatives, while the whole consolidation process will be completed within three to four years.

With one common distribution system and a single marketing strategy, the consolidated shops will have lower prices and become more competitive. With 4,000 outlets, Społem will become one of the biggest retail chains in Poland. Tesco, for instance, has 102 outlets in Poland and Biedronka, 800.

Shops which want to consolidate will be purchasing goods through a company called Krajowa Agencja Handlowa "Społem" (KAH), which will negotiate prices with producers, set a common price strategy and be responsible for marketing and logistics. "The shops will have lower prices and the same range of products," said Joanna Kwiczor, KAH's marketing director, adding that Społem's strength lies in the locations of its outlets. Some 96 percent of shops are in towns, city centers or housing estates.

It seems that Krajowa Agencja Handlowa is bound to be a great beneficiary of the consolidation. "Taking into account the fact that we have been functioning as a purchasing center buying goods straight from the producers only since May 2006, we cannot compare past financial results with those for 2006 and 2007," said Kwiczor when asked about how much the company's revenues will grow as a result of Społem consolidation. KAH was set up by the association of cooperatives KZRSS Społem, and this year a new investor has been won: Piotr Komorowski, co-owner of yogurt producer Bakoma, now holds a 50-percent stake in the company.