It’s time to zoom in. Czechs have learned to count and know that bigger is better

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

Rising prices of goods changed the behavior of Czechs in shops. They finally learned to count – or rather to recalculate.

“We see different investigation strategies. One of them is the purchase of larger packages and savings through the so-called unit,” he says in the program Agenda SZ Byznys Zdeněk Řiháčekdirector of Procter & Gamble for the Czech Republic, Slovakia, Croatia, Slovenia and the Baltic countries.

He points out that while large packages used to be the domain of washing powders in particular, they are now moving into other categories as well.

“You’ll definitely start to notice liter shampoos or liter pump shower gels on the shelves that weren’t there before,” he explains. Although the total price of such goods is higher, the price per washing unit or milliliter of shampoo is, on the contrary, lower than for the classic packaging.

“Of course, you have the price for one milliliter on the price tags, which helps. At the same time, however, these are items that are not in the order of thousands of crowns, so there is no barrier that I cannot buy a larger package because it is very expensive,” he adds.

However, it is not the only saving strategy of Czech customers. Increasingly, they also choose energy-saving products – even in drugstores.

“I’ll give you an example, we’ve significantly innovated washing gels and capsules so that people can wash for short cycles at thirty degrees and therefore save on energy, for example,” says Řiháček, adding that there is now great interest in these products.

According to him, the third way in which Czechs save money is by switching to private and cheaper brands, which today account for roughly a quarter of drugstores.

“Private brands have started to gain strength. We see them in washing powders and diaper categories, but if you look at cosmetics, on the other hand, the trend there is a lot of brands that are small, but not so cheap,” he explains.

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

At the same time, it is innovation that is to blame for the fact that drugstores are becoming more expensive. “I would distinguish two types of inflation. The first inflation is the cost of producing the product, the second inflation is caused by innovations,” he explains, adding that it is precisely because of the costs of innovation that prices will rise.

Řiháček also commented on the level of prices and why goods in domestic drugstores are often more expensive than in German ones. In a recent interview for SZ Byznys, the director of the drugstore network Rossmann Karol Jakubek also opened up about this topic, who explained the differences by the policy of individual brands.

Řiháček rejects this and draws attention to phenomena which, according to him, affect the price far more. “One factor, of course, is the environment. When you look, there is a difference in VAT, different policy measures and the market environment also play a role. The German market is very much dominated by discounters, it is much more consolidated and much more competitive. Then there is also the factor of sellers – that is, our partners and their expectations for margin, for profit. I think the price is a complex problem and it’s not just a problem of someone somewhere giving a purchase price,” he says.

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 stopped new innovations in Russia, for example, it continues to supply its basic goods there. However, according to Řiháček, it doesn’t bother Czech customers that much.

“I don’t think it’s a theme, nor do I think it’s the main aspect that affects our sales. If there was an impact, I wouldn’t say it was dominant,” he says.

Agenda