It’s time to zoom in. The Czechs learned to know that bigger is better

You can also listen to the audio version of the interview.

Rising commodity prices changed the behavior of checks in stores. They finally learned to count — or to count again.

“We see different investigative strategies. One of them is the purchase of large packages and savings through so-called units,” he says in the program SZ Byznys. Zdeněk ŘiháčekDirector of Procter & Gamble for the Czech Republic, Slovakia, Croatia, Slovenia and the Baltic States.

He pointed out that while large packs were the domain of washing powders in particular, they are now moving into other categories as well.

“You’ll definitely start noticing liters of shampoo or liters of pump shower gels on the shelves where they weren’t there before,” he explains. Although the total cost of such products is high, the price of a washing unit or a milliliter of shampoo, on the contrary, is lower than in classic packaging.

“Of course, you have the price per milliliter on the price tags, which helps. At the same time, these are products that aren’t in the order of thousands of crowns, so there’s no restriction that I can’t buy a big package because it’s too expensive,” he adds.

Checkers wash at lower temperatures, using less energy

However, this is not the only savings strategy of Czech customers. Even drugstores carry a selection of energy-saving products.

According to him, a third way for Czechs to save money is to switch to private and cheaper brands, which today account for a quarter of drugstores.

“Private brands are starting to gain traction. We see them in washing powders and diapers, but if you look at cosmetics, on the other hand, there are a lot of smaller brands, but not so cheap,” he explains.

Procter & Gamble doesn’t produce private brands and doesn’t even think about it, even though their share is growing precisely at the expense of traditional brands. According to Řiháček, investments in innovation help maintain market share.

Innovations make production more expensive

At the same time, innovation is the reason why drugstores are so expensive. “I would distinguish between two types of inflation. The first inflation is the cost of producing the product, and the second inflation is caused by innovation,” he explains, adding that prices rise precisely because of innovation costs.

Řiháček also commented on the level of prices and why products in domestic pharmacies are more expensive than in Germany. In a recent interview for SZ Byznys, the director of the pharmacy network Rossmann Karol Jakubek opened up about this topic, explaining the differences in the policy of individual brands.

Řiháček rejects this, drawing attention to events that, according to him, affect prices more. “One factor is, of course, the environment. As you can see, there is a difference in VAT, different policy measures and the market environment also play a role. Discounts dominate the German market, which is very integrated and very competitive. There is also the factor of sellers – that is, our “Partners and their expectations are margin, profit. I think price is a complex problem, it’s not just someone paying a purchase price,” he says.

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Czechs don’t care about sales in Russia

Procter & Gamble faces criticism abroad for still operating in the Russian market, even though many Western brands have already left it. Although P&G has halted innovation in Russia, for example, it continues to supply its basic products there. However, according to Řiháček, this does not bother Czech customers that much.

“I don’t think it’s a theme, or I don’t think it’s a major factor affecting our sales. If there is an impact, I wouldn’t say it’s been dominant,” he says.

Agenda

A quarter of an hour about business. Interviews with top Czech business leaders, company founders, experts.

Monday through Thursday on SZ Byznys and all podcast apps.

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