The DELMART grocery chain aims to satisfy customers by combining locally farmed produce with international favorites.
The grocery retail market in Czechia is highly competitive. With Czechs’ purchasing power and quality of living going steadily up in the long-term, local and international brands are bringing a wide variety of options, especially in big cities such as Prague.
But one homegrown Czech company stands out from the crowd. DELMART was created eight years ago by CEO Dušan Mrozek with a focus on high-quality food. The store combines local produce from Czech farmers with international favorites which are becoming increasingly popular among Czech consumers.
Great food from Czechia and beyond
DELMART’s business model is simple. Unlike giant grocery retailers with stores stocking everything from spaghetti and salmon to sweaters and sponges, DELMART focuses on food and drinks. Its stores are places for buying delicious groceries; not for finding everything you might need for your home.
This allows a greater focus on a quality seasonal selection. According to Dušan Mrozek, this emphasis on quality is the most important consideration for DELMART customers.
“Our core offering is consistent quality which is affordable too,” he says. “Our stores are fully focused on food, so our non-food offer is very limited. We are not an overpriced ‘deluxe’ shop, but at the same time, we don’t have to stock low-quality products to fill our shelves.”
DELMART sources its goods from Czechia and abroad. International products come mostly from France and Italy, ensuring consistency and quality across a range of product categories.
“We offer customers brands which they can’t find anywhere else here. It’s roughly a 50/50 split between Czech and international products, although of course it’s quite difficult to precisely define ‘Czech food.’ Our key supplier is Intermarché, with whom we signed an exclusive contract for private label products around two years ago,” says Mrozek.
“Generally, Czechs are very fond of food from Greece, Italy and France,” he continues. “From Greece, it’s mainly feta, olives, cheese, yogurts and other dairy products. In Italy, it’s everything from charcuterie through to dairy products such as cheeses, mozzarella and so on. And from France, the most popular products are poultry, cheeses and biscuits.”
“Speaking more generally, our most popular products are ready-to-eat avocados, baguettes (I’m proud to say that we have the best baguettes in Prague), free-range and organic eggs, milk sourced from a farmer in West Bohemia, and then things like mozzarella, French and Italian cheeses, and other popular international products. Most of our top sellers are of an international nature.”
Serving lovers of good food
It might be assumed that, with its emphasis on quality, DELMART mostly caters to wealthier customers. But according to Mrozek, the distinguishing feature of the brand’s customers is not socio-economic status, but discernment when it comes to quality food.
“Our customers are those who value the quality of food, regardless of age, income, or anything else. It’s about appreciation of food. I know many people who are very well off, but they spend their lives eating cheap food, while others with a lower income spend more on food and economize elsewhere. People increasingly see a healthy lifestyle as being not only about exercise, clean air, and so on, but also about what they put in their body,” he explains.
Czechs remain cost-conscious in their food habits, which Mrozek says “partly comes from people’s mentality, and partly from the depth of their pockets. But this isn’t limited to Czechs; Germans are also extremely cost-sensitive.”
But amid economic turbulence, the price gap between quality and cheap products is narrowing. DELMART is weathering rampant inflation in the Czech food and drink sectors better than most, due to the fact it imports much of its food from France, where there is lower inflation.
“The food inflation from Czech manufacturers is crazy, and no one can give me a reasonable explanation for why milk and butter prices have gone up by so much. Food inflation in France is roughly half of ours, even though their problems with packaging, availability and logistics are the same. We have increased our prices by only 9.5 percent overall, which is significantly below the national average, making us more affordable for less affluent customers.”
The DELMART story
Mrozek created DELMART in 2014, having previously operated the Marks and Spencers franchise in Central Europe. Setting up his own grocery brand was an opportunity to focus fully on the side of the retail business which interests him the most: food and drinks. “Food came to me naturally when I decided to start DELMART; while doing business with M&S, the food part of the business was always the most exciting for me,” he says.
DELMART has grown to become a household name in Prague. Yet the company has not yet expanded beyond the capital or internationally, which Mrozek says is all part of its mission to deliver quality at all times.
“If we ever open a shop outside Prague, it has to be 100 percent DELMART, in keeping with our brand. We would never compromise on quality, and if we opened in Brno, for example, we would need 3 to 4 shops to justify the logistics costs. So that’s why we’re focusing on Prague, and I believe we still have a lot of room to grow here.”
This means that despite the rising cost of living, DELMART’s customers in the Czech capital can expect to keep enjoying the company’s great products. A strong and focused business model focusing on delicious food and drinks is, for DELMART, the recipe for success.