Virtually no Tesco signage and an array of brands makes the grocer’s first true department store a one-off. John Ryan visits its Czech home.

Picture this: you’re a highly successful retailer, the world’s third largest, and you dominate your home market. More than this, you operate cross-border and have more space overseas than you do in your home country. And all of this is the outcome of a highly controlled format strategy that has made your name talismanic across the world.

Then, suddenly, a decision is taken to open a large store that not only fails to display your name, but is utterly different in look and feel from any of the format norms that have been so successfully rolled out. No prizes for working out that the retailer in question is Tesco, but a pat on the back for knowing that the grocer has just launched an entirely new store format in the Czech Republic.

Known as My Liberec, this is a 75,350 sq ft (7,000 sq m) department store-cum-supermarket, depending on which level you happen to find yourself on, and externally (it sits within a spanking new shopping mall) there is no reference to its parentage. Stand outside the mall and a small part of the building bears both the My Liberec and Tesco logos, one above the other. However, this is only small and nothing like the signage on the trio of yellow buildings less than 200 metres away, which bore the supermarket’s name until the end of last month.

The first and most obvious question is why has Tesco done this and, equally, why in Liberec? Tesco Czech Republic main board director Eva Williams says that the customer in this country is very different from the UK and expectations about what Tesco can provide are not the same. This links with Liberec itself. Although a city of about 100,000 people – the country’s sixth largest – there was nothing that could really be termed a department store, in the way that is understood in the UK, until the arrival of My Liberec on February 26.

Initial work

The construction of the Forum Liberec mall, by Dutch firm Multi Development, provided the opportunity for Tesco to try out a new format, according to store director Bohumil Zematy. Tesco worked with UK design consultancy Fitch on the project and initial work began about 18 months ago.

The outcome is startling in many ways, not least because it does not look anything like a Tesco store. If approached from the upper level, which serves as the main entrance because the lower floor is below ground, it looks like a cross between a Waitrose store and an upscale German food hall of the kind found in department stores such as Karstadt or Kaufhof.

The layout is much as you might expect, with fresh fruit and veg close to the entrance, longer-life food in the aisles beyond this and a series of shop-in-shops: a bakery, fresh meat counter and fishmonger around the perimeter.

The internal landscape is low-rise, allowing the many pillars to be clearly seen. Each of these is topped by an internally illuminated frosted glass beacon, telling shoppers where particular food categories are located. And the shop-in-shops at the rear have more in common with department store food halls than supermarkets.

It’s also worth noting the beers, wines and spirits area – decidedly upmarket with wooden-perimeter panelling and floors and large light-box graphics of alcoholic drinks. This is the Czech Republic, home of Pilsner beer, so the bottled ale display impresses.

Now head downstairs, via a travelator, and it is almost as if you have arrived in a different shop. There should perhaps be no surprise about this. Many Continental department stores operate a model with a food hall in the basement that frequently seems to bear little relation to the rest of the store. The thing about My Liberec is that the food retailing floor happens to be on the upper rather than the lower level.

There is a reason for this reversal of the norm. At 50,050 sq ft (4,650 sq m), the lower floor is almost twice the size of the food hall, giving Tesco free rein to experiment in various ways with a large number of departments.

Managing space

The basement has a very large area for a single floor and with a high ceiling there is a real danger that it might have ended up looking like a barn. The obvious first requirement therefore was to make the space feel manageable in size. This has been achieved via a series of white circular rafts suspended from the ceiling and merchandise islands linked by large walkways. There is almost the sense that there was rather too much space on this floor, with a quasi-beauty hall at one end followed by men’s and women’s departments, leading to children’s clothing and finally homewares.

Between the two extremes is a mix of branded and Tesco own-brand merchandise, although unless you knew, it would be hard to work out which is private label and which not. Both the F&F (the Florence & Fred own-brand of old) and Cherokee ranges have their own dedicated equipment; the former is housed within freestanding open-sided brown wood wardrobes and shelves and Cherokee displayed on white high-gloss fixtures. Williams says: “Cherokee and F&F are special ranges for the Czech Republic and Central Europe. We have teams working on this, with some of the buyers based in the UK and some in Prague.” She adds that in spite of the department store environment “the prices are exactly the same as in the hypermarkets”.

The real point of difference about this floor is its branded content. Tesco and Fitch have clearly worked with the many brands, ranging from Springfield and French Connection to Levi’s, to create a space where a certain amount of point of sale can be displayed, but the overall feel is that you are within My Liberec, rather than a series of branded shops. There are also circular mid-floor displays where brands are mixed on mannequins, dressed by a team from the Prague head office.

Other than the conspicuously white and bright beauty department, which has specific areas signed by overhead beacons for Lanc Clinique and Est饠Lauder, lighting levels on this slick floor are generally low. Spots set into the ceiling rafts highlight each brand, adding interest to the overall panorama.

The Czech capital is next in line for a Tesco department store with My Prague set to welcome shoppers in the autumn. The retailer says that this is a format that has been created for Central Europe and that nothing like it will appear in the UK. However, It’s not hard to imagine that the F&F displays might yet make the transcontinental journey as they look considerably better than what is to be found in a UK Tesco Extra. The only problem facing Czech Tesco is getting shoppers down to the department store floor. On the day of visiting the food hall was busy, but the department store bit of the enterprise was almost empty. Nevertheless, this is the best-looking store in Liberec.

Store facts

Location: Liberec, northern Czech Republic

Size: 75,350 sq ft (7,000 sq m) and two trading floors

Departments, lower floor: Mens-, womens- and childrenswear, and homewares

Departments, upper floor: 25,295 sq ft (2,350 sq m) food hall

Own-brands: Cherokee and F&F

Design: Fitch, London

Next step: My Prague opens autumn 2009

The Road to liberec

The road that has led to Tesco’s My Liberec department store is by no means straightforward and must be counted as something of a surprise given the retailer’s Czech Republic record.

Tesco arrived in the Czech and Slovak republics in 1996 following its acquisition of 13 large stores from US retailer Kmart. Since that time it has grown rapidly, principally by opening supermarkets and hypermarkets as well as a smattering of smaller Express stores and petrol stations with attached forecourt shops. Following the purchase of Carrefour’s operation in the country in 2005, it now boasts 106 stores.

Glance at the list of shops that it operates in the country and there are six that bear the title “department store”. Among these is My Liberec, the only one of its kind at present and the only UK-style department store, with the other five stores being branded as Tesco. And in Liberec, a walk of roughly 200 metres takes you from the new store to the building that was the city’s Tesco store until the end of last month.

This was considerably larger than the new store, sprawling across three linked buildings, each of which traded from three floors. Externally, it was a curious yellow-ochre in colour – “very ugly” (pictured) as an English-speaking Liberec resident remarked when questioned about its whereabouts. Now it stands empty and its replacement is, from an aesthetic perspective, an altogether more pleasing prospect.

As well as representing a break with the Tesco Czech norm, the new store also points the way towards the future. All concerned with My Liberec are quick to point out that managing director of department stores Marcus Chipchase’s vision is a work in progress and that there are still lessons to be learned.

Nevertheless, with My Prague opening in the autumn, it seems probable that the conversion of Tesco’s remaining four department stores will follow. The format also looks sufficiently portable to be exported to neighbouring Eastern European Tesco countries, Hungary and Poland. Plans are in place for a branch to open in Bratislava, the Slovak capital, later this year.