“Brave plan of the Polish giant”. The Germans will get acquainted with Pepco
While tourists flock to Potsdamer Platz on an icy late-November afternoon, the kiddie place electric palace complex is almost empty. However, it is here, hidden in the basement, that the German retail war control scene is to take place.
A crowd of 50 people surrounds a Pepco store decorated with balloons. Polish low-cost clothing, homeware and homeware retailer opens its 3,000th store in Europe. And as for Germany, an unknown presentation of gigantic plans: Pepco wants more than 2,000 branches here in the longer opening width. Right in the middle. In the case of a suspicion that is considered oversaturated – and where it is found, fashionistas like Primark even close their first stores or, like Orsay, completely disappear from Germany.
2,000 stores in Germany: The ten target is also supported by competitors such as Kik and Tedi with 2,700 and 2,500 stores in Germany respectively. WELT looks at the plans of the network, which is still small in this country, and explain how the plan works.
See also: Major changes at Pepco. Stores are getting bigger, household appliances will go on sale
Expansion from Poland
Pepco started by opening its first store in Poland in 2004. With the years index, the number of stores is currently growing in Eastern Europe. Even at a time when the network was constantly opening up new influences and entering new countries, most recently countries and Germany. Pepco Group’s parent company has been listed on the Polish stock exchange for a year, and its state supplier is the Dutch Steinhoff International Holding.
The Pepco concept is best located by walking around the branch. The customer enters a bright and tidy shop, the hangers are stacked with exclusive pajamas for children (€5), women’s sweaters in pastel colors (€10) and fashionable sneakers (€15). There are no used baskets to rummage through or make discount boards.
The surprise is double: a pleasant shopping atmosphere at prices that we would actually expect to be three times higher. Even more so when in the back we come across coated pans for 5 euros and tasteful decorative items in the same price range. At the latest with children’s toys, we get Pepco’s second impression: cheaply produced military helicopters or pink dollhouses. It is striking that on all products the prices are printed in letters in the system of different blue currencies.
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Pepco is “price aggressive”
The Pepco concept can be included in the non-food category. “This segment has been around in Europe for 20 years and has done well,” says Chehab Wahby, partner at strategic firm EY-Parthenon, responsible for retail and consumer protection. “Combining volumes, sourcing large quantities from Asia, that’s what the successful players in this non-food use do – use Wahba.
Additionally, providers provide costs because they do not use the services and generally use the services. — In the end, certain products cost less with a certain name Wahby says. The business model lives primarily from the fact that the customer is surprised with exclusive prices.
However, customers belonging to domestic competitors such as Kik, Woolworth and Co. — In the adopted pricing procedure, things are not going well. Customers who usually shop there no longer come – said Axel Augustin from the Leather Footwear Textiles Trade Association on behalf of WELT. That’s what Pepco is like: just right priced.
However, the company looks calmly at the problems of competition and tradition. Focusing on family apparel accessories and household items and decorations, Pepco has a position. — There are no competitors’ partners in this regard says Manuela Gräber, member for change in Germany.
The perfect Pepco atmosphere
In addition, Pepco is particularly good for comfort – enjoy the convenience of shopping. An EY expert believes it’s important to help customers with a “nice shopping experience” – not scare them away with a sterile atmosphere.
For suppliers in the low-price non-food segment, it is important to have a sense of trends, colors and contemporary presentation. There are still a few suppliers in Germany that have untapped potential in terms of shopping experience – so there is room for new competitors, says Wahby.
However, with its clothing products at Pepco prices, it also takes risks. Criticism of cheap fashion has intensified. Increasingly, stigma is added, says Gerrit Heinemann, professor of retail at the University of Applied Sciences Niederrhein. – Sustainability increasingly important to the consumer – how.
See also: Superpower plans of Pepco in Poland. where it cuts costs
Pepco itself does not see itself as the addressee of such criticism. — Cheap does not necessarily mean good quality or other conditions in poor conditions – says Steiger, responsible for operations at Pepco. “We produce the main source and thus support prices. Many years of cooperation with producers – he says.
When it comes to product quality, Steiger points out that Pepco also has many sustainable products, for example the cotton-like effect. – We will not recognize the development indicator as a trend that we will indicate, but actually as the right one to be able to operate on this market at all – to obtain.
Through its “Code of Conduct”, Pepco also adheres to the procedure of the legal supplier standard and provides assurance of safety, work safety and additional activities.
The example of Bangladesh shows that you have chosen music for many rehearsals. The country is second only to the world’s top ten textiles and apparel. The minimum wage set by the government is 8,000 taka, or 85 euros, per month of work.
Pepco does not say who the suppliers are and where it is used. They have a manufacturer not only in Asia, but also in Europe. Many products actually surprise with their quality standard. The fabrics are soft, the smell in the store is pleasant, it is not astringent-synthetic, as is usually the case with competitors.
Currently, the company has a well-known partner on its hangers. For Disney’s 100th Anniversary, Mickey Mouse and Baby Yoda Laugh at Customers with Colleagues. The household section that sparkles in itself ensures the effectiveness of the tea cup aids found on current decorating blogs. And products ranging from children’s corduroy pants to toilet brushes also carry the ecolabel.
Does the crisis hurt or help?
But won’t inflation become dangerous for Pepco? According to research, three out of four German consumers limit their consumption. For Pepco CEO Anand Patel, the crisis is not a threat to his development plan. On the contrary.
The time to step up is right now: Since the 2008 financial time, many ad networks such as Aldi, Lidl and Primark have made their operations public, Patel tells WELT. “Customers have to keep an eye on their users, now is the time for the big low-cost retailers,” he says.
Currently, as noted, there are many local sites in individual countries, and even in large countries, including Germany, Spain and Italy, there is now an increase in development.
Money-consuming mass production. The balance sheet of “Pepco Group” looks quite rosy in this respect. By autumn this year, the turnover of more than EUR 4.8 billion, i.e. 17.4 percent more than in the previous year. more than in the year of being.
See also: The Pepco chain increased revenues by 41 percent. “Happy Holiday Season”
With 3,000 stores, Pepco has long been one of the largest non-food discounters in Europe. So far, the focus has been on business across Eastern Europe: in addition to the native Poland with almost 1,200 stores, Lithuania, the Czech Republic and Hungary are particularly well represented. For comparison, the European market leader in the same category alone, Action, with turnover at the level of high-quality euro quality, reached 2,000 stores in 2021.
Thanks to a good contract with Asian suppliers, Pepco is an attractive alternative for many customers at a lower price. Successful market entry in Germany and other countries is possible. Thanks to playing Pepco products, a completely new segment is also available. The questions that will determine the success of Pepco are therefore: Is the Pepco format innovative? Will they manage to appeal to customers with a knack for trends and fashion in the future?
Many customers who used to shop at high prices are now drawn to the discount store, according to retail expert Wahby. However, also marked: the market is not trivial and the competition here is fierce, but if one stays away from the high-fashion zone and focuses on other texts, then it can be different.
In the long term, the company wants to become a supplier, in line with its growth strategy.
Pepco’s plans include access to all monuments over 20,000 years old. residents. In its initial stage, it is outside of all in eastern Germany. It is quite possible that the unknown name of Pepco will soon not be so unknown. Own company that it takes more than three or four years to build 2,000 branches. Whether there will really be that many remains to be seen.