Wave of Konzum Closures to Follow Closing of Rijeka and Osijek Stores

By 5 January 2018

According to Konzum's management, the stores in Osijek and Rijeka incurred losses and didn't have business prospects...

As tportal writes on the 5th of January, 2018, citizens of Rijeka and Osijek were surprised by the ''new year'' closure of two large Konzum stores, the one which operated in Rijeka for the past twelve years being the biggest of all.

According to some investigating into the situation from tportal, it seems these aren't the only closures Agrokor's Management plans.

Agrokor's extraordinary administration claims that the closure of the centers in Rijeka and Osijek is no unusual measure. "This is to do with the announced sales network optimisation, within which are plans to close one hundred sales outlets," stated a statement from Agrokor to tportal.

The stores in Rijeka and Osijek brought losses and, according to Konzum's Management, didn't have business prospects.

''In accordance with market conditions, Konzum has closed stores every year, and so it has optimised the management of its sales network as a part of regular retail practice. As part of the restructuring process, the focus has been placed on increasing the efficiency and profitability of each part of the company while preserving jobs, all with a view to achieving long-term sustainable business,'' Agrokor stated.

The huge company has emphasised that during the restructuring process, special attention is being paid to Konzum employees and the preservation of their jobs by redistributing them to new positions near their place of residence, or by other arrangements. Thus, all former employees of the now closed centers in Rijeka and Osijek have secured other jobs in nearby Konzum shops.

According to available data, around 60 Konzum stores had been shut down by the end of September last year, but as far as the majority of the smaller neighborhood stores are concerned, closure didn't really attract such public attention as it naturally did in the case of the much larger sales outlets in Rijeka and Osijek.

The closure of the Konzum store in Tower Center Rijeka coincided with the expiration of the lease agreement, and Agrokor stated that the rental price was not the reason for the closure, but inadequate ''traffic''.

Significant problems face Konzum which can cause difficulties in dealing with the competition, two of them are non-optimal sales spaces and non-profitability of part of the store.

The analysis undetaken by the company show that the best results are achieved by medium-sized stores (up to 3,500 square meters of sales area), and a significant part of Konzum's stores exceed this format, which in turn apparently jeopardises the system's overall productivity.