Adjustments in central Europe

Bratislava, a city of around 430 000 inhabitants, is the only capital in the world built directly on the border with another country, Austria. Recently Bratislava has combined with Vienna to become the focus of Centrope, the so-called central European region, which is why the two cities are often referred to together as the “Twin City”. So it is virtually necessary for a trading company like Baumax, which operates in central Europe and has its company headquarters close to Vienna (in Kloster-neuburg), to have its eyes directed eastward as well, towards Bratislava. With 15 Baumax stores and a combined retail area of approximately 140 000 m², Slovakia is one of the most important countries for the Austrian DIY retailer. The company has been actively involved there for a good 16 years, and was indeed the first DIY group in Slovakia altogether. Baumax has around 1 100 employees in the country at present. In August 2010 came the opening of Baumax’s fourth store in the Slovakian capital in the Lamac district of Bratislava. This outlet has a retail area of 14 000 m², which makes it the biggest Baumax in the country. There are 105 employees here alone. The DIY retail group’s headquarters for Slovakia and the Czech Republic, which is affiliated to the superstore, was inaugurated at the same time. The headquarters team of approximately 40 is responsible for the areas of procurement and ranging structure, marketing and distribution in both countries. A revision of the product range became necessary as a result of the permanent low pricing concept introduced in Slovakia to coincide with the latest store opening. This had been established in Croatia in 2009, for instance, and guarantees a ten per cent price reduction to any customer who finds a product offered elsewhere at a lower price than at Baumax. Jiˇrí Šulc, managing director of Baumax in Slovakia and the Czech Republic, explains that the company was previously perceived as relatively expensive, which is why it intends to make improvements to the “price perception on the customer side”. You obviously need more customers if you want to generate more sales. In the opinion of Martin Essl, the Baumax boss, even though Slovakia has made astonishingly good progress in recent years, becoming the first country in eastern Europe to introduce the euro, the world in general and Slovakia in particular have seen fundamental changes in the last two years. Private building activity in the country has fallen by 30 to 50 per…