Paul Klotz, SPAR Austria’s Director for international business, recently gave an interview about the company’s expansion strategy and challenges. He advised that SPAR Austria plans further expansion in Northern Italy where the company intends to become the market leader in additional regions. However, Paul Klotz identified a number of challenges the retailer is facing, including employee recruitment, or sourcing sites for new stores. Both of these issues will become increasingly difficult.

Growth in Italy

He advised that ASPIAG, operating in Northern Italy, is focusing on expansion in the provinces of Lombardy and Emilia Romagna in particular. Sourcing new sites is becoming more complex, leading to the conversion of existing buildings to maintain growth. Expansion through newly sourced land and store construction will be harder in the coming year. In addition to finding locations, it is challenging to find construction companies to work with.

Expansion issues

The abovementioned issues are already impacting expansion, Paul Klotz continued. For example, in Slovenia, a store could not be constructed as no suitable company could be located to build it. In addition, there are issues around employee recruitment which has unusual facets.

Employee recruitment challenges

Paul Klotz advised that increasingly, food retailers recruit chefs from hotels who enjoy regular working hours in SPAR Austria’s company-owned restaurants. However, industrial companies then in turn recruit from food retailers, offering them higher packages. Elsewhere in Europe, the industry is competing to recruit skilled employees, particularly those already educated in butchery, delicatessen, or fish. It is possible to rapidly train skilled workers to restock store shelves or operate a cash point, but training a fishmonger takes more time. Therefore, the company is focused on identifying talent very early.

Prior to the pandemic, filling vacancies could be done quickly, Paul Klotz added. Today, many specialists recruited from other countries have not returned to work e.g. Bosnians did not return to Croatia and Romanians did not return to Italy. This highlights the challenge of managing migration flows.

In response to a question about wage increases to fill vacancies, Paul Klotz felt this could happen. Prior to the pandemic, there were enough truck drivers. Now, despite increasing the monthly salary by €300.00 for truck drivers, there was almost no response to fill vacancies. The problem is that retailers cannot pay a truck driver more than they can pay a delicatessen employee.

To highlight the number of positions currently vacant in SPAR Austria, Paul Klotz advised that in Austria, the company is currently looking for 1,200 colleagues. In Italy, the company still needs 120 truck drivers and in Croatia the company is short of 700 employees. This is a large number of vacancies, and the company cannot ask existing employees to work overtime all the time.

Paul Klotz believes it is possible that smaller family businesses that can no longer cope with this shortage of staff will sell their stores.

Acquisition intentions

Paul Klotz advised that the company continues to monitor the developments in all markets it operates. SPAR Austria is currently considering buying a food company. There may also be opportunities to acquire retailers with good locations and sufficient staff abroad which would be a growth spurt for the company.

Investing in the future to meet anticipated demands

Paul Klotz said that SPAR Austria is entering a period of five to ten years with strong investments in logistics: in Croatia, the company is building a wholesale business, in Slovenia investment is being made in expanding the logistics centre, and in Italy several projects are being invested in. For example, in a new large warehouse south of Padua the company has built a meat cutting plant, there is capacity to receive and store fruit and vegetables and they have added refrigeration to warehouse dairy products. There will be a warehouse for slow movers and a regional warehouse for dry goods in the next construction stages. The logistics capabilities in Hungary are also being expanded. In short: the company is reorganising logistics in all four countries and will strengthen the wholesale structures. These investments represent a giant step for the SPAR business abroad and will allow the company to move completely different volumes of goods.

Source: Lebensmittelzeitung