Responsible retailing rides out the crisis

Sébastien Krysiak, Castorama Polska’s CEO, talks to the BPCC’s Michael Dembinski about the challenges that Poland’s retail sector will face in the post-Covid world.

K retailing in Poland has had a patchy record with several household names entering and leaving the market. Kingfisher's Castorama brand has been very successful. To what would you attribute that contrast, comparing the experience of British retailers in the Polish market?

Over the last 23 years Castorama Poland has become an important element of the Polish economy. This success was built on the solid foundation of Castorama and Kingfisher Group values such as quality, openness, modesty and simplicity. These values enabled us to create a community based on solidarity and positive relations. From the very beginning, our brand has been associated with professional advice and a broad product offer – that’s the Castorama which Polish clients fell in love with. For over two decades, thanks to the engagement of our entire team, we have been systematically strengthening this image. Today the Castorama name is practically synonymous with home improvement.  Currently our chain is created by over 12,000 outstanding specialists in 81 stores. It is they who help our clients face the challenges connected with creating a functional and attractive living space. Our comprehensive approach to home improvement projects is what makes us stand out on the market. Supporting our clients’ purchasing decisions, our sales advisors provide comprehensive assistance in choosing the products needed to complete any idea. Clients looking for paint will also receive advice on primers, the right tools as well as information on how to prepare an interior for such a job. Our clients appreciate this approach.  A company’s success is not only the result of its product or service offer. A company must also achieve a functional balance within its local community. We understand that responsibility is one of the pillars of our business; we place great emphasis on creating a positive work environment, business relations as well as supporting local initiatives.

From the operational point of view, getting a large retain chain like Castorama ready for lockdown must have been one of the biggest challenges of your career. What steps had to be implemented to ensure the health and safety of your staff and customers in time for store opening on Monday 16 March?

The last few months have been very challenging for many organisations. The unprecedented scale of the challenges we faced on a daily basis was a true lesson for us. Even before the state of epidemic was announced we had created a team to supervise all processes connected with the spread of SARS-CoV-2. Initially this team was tasked with preparing procedures and mechanisms for ensuring the safety of our employees and clients. Effective decision-making was crucial in this period as the company’s ability to maintain business continuity, stability and protect our workplaces depended completely on the efficacy of the safety measures we were implementing in our stores. Our employees have always been at the core of every decision and all actions taken in this situation had to be focused on their wellbeing and safety. Before we decided to open our stores to clients I had to be completely convinced that our safety measures and procedures were top quality.

The need to quickly adapt our supply chain – from ordering to client service – was also extremely challenging. The scale of our e-commerce business changed instantly. Here we must recognise the efforts of our store teams who managed to handle a several-fold increase in online order volume without compromising on service quality. The pace and success of implementing safety measures and adjusting our business practice to the ever changing restrictions were a testament to the organisational efficiency of our teams. The challenges we faced have made us stronger.

Castorama in Poland is not only about the stores – it has a significant purchasing operation that exports Polish-made products sold in Kingfisher plc stores in the UK, France and other markets. How does your cooperation with Polish manufacturers look, how important is it in the overall supply chain? Tell me about your trampolina dostawców ('suppliers' springboard') initiative...

Our group’s scale gives us a great competitive advantage. It enables us to offer high-quality products at much better prices. As a member of the Kingfisher Group, our offer is based on two aspects – ‘unify’ and ‘unique’. ‘Unify’ means that all members of the group share part of their range. This means that our order volume is very big and this translates to lower sourcing costs. One of the elements of building a common range for all group members is the process of selecting the unified offer products, which introduces competition based on production quality. Here our domestic producers such as Barlinek, Complex and Metalkas have a great opportunity because they can gain access to new markets. Seeing Metalkas open a new production facility after winning a Group-wide tender was a source of great satisfaction for us. Selling on many markets always provides an opportunity to develop production capabilities and create new workplaces. Cooperating with large retail chains makes it possible to quickly increase the scale of production. Under the new ‘Powered by Kingfisher’ plan, Castorama Poland will have improved flexibility and agility to meet customer needs.

As the pandemic began, Poland had record-low unemployment. Recruitment and retention of staff will no doubt remain a major challenge in the post-Covid-19 economy. How do you assess the quality of vocational training and the apprenticeship system in Poland? How does Castorama work with education and training providers to ensure access to the right skills?

Castorama is a well-known and respected brand on the Polish labour market. Young people eagerly choose large, reputable companies as their first employer. Companies are constantly looking for new, effective ways of recruiting and attracting talent. One such way is to cooperate with educational institutions, by creating sponsored classes, which improves competence development and the workplace preparation of future employees. That’s why we created and implemented the “Direction Castorama” educational programme. The programme stems from the need to acquire and develop professional skills in real work conditions. The materials are suited to the students’ particular needs, based on many years of observing the job market and our knowledge about changing consumer behaviours. The programme benefits schools, it benefits us as a potential employer, and it benefits the students themselves. We also provide internship possibilities to young people from outside the Direction Castorama programme.

CSR remains a major priority for corporate business. Please tell us about the Castorama Foundation's activities in this sphere, and how that contributes overall to the brand values in Poland.

Responsibility is the foundation of our business. It translates to many aspects. One of these is achieving a neutral or even positive impact on the environment. Through our sustainable development programme we are improving the energy efficiency of our facilities as well as protecting crucial resources such as water, timber and air. We have also been increasing the share of sustainable home products in our range, helping clients develop good habits. Another area is our cooperation with local communities. That’s why last year we established the Castorama Foundation, although its history is much longer. Everything started with our employees’ initiatives. We opened our first store in 1997 and from the very beginning we began supporting local communities, for example by renovating fire-damaged homes or flats. Back then we supported individuals and institutions such as orphanages by providing them with building materials. Our store colleagues volunteered to help out in such initiatives. There have been many local initiatives taken up by our employees. Over the last five years, Castorama has dedicated almost two million zlotys to home improvement and local community projects. The Foundation was created to give these actions a greater scope by taking advantage of scale. We introduced and are developing employee volunteering. Every Castorama employee can dedicate 24 hours of their work time per year to charity. This creates the potential for 12,000 engaged employees throughout the country to participate in volunteer projects.

What are the medium- and long-term plans for Poland in terms of store openings and expansion of online retailing? How has Covid-19 changed Castorama's strategic direction for the Polish market? Are you sensing an increased interest in home improvement among Polish consumers after the lockdown ends?

The ongoing easing of restrictions brings us closer to returning to the pre-epidemic investment strategy. Although modifications will have to be made to suit the current market conditions, we look to the future with optimism. Currently our priority is to maintain the company’s stable position and protect our workplaces. As a responsible employer we understand the need to focus on this not only now but also in the future. Therefore we have made long-term investment decisions which will provide our chain with a greater competitive advantage.

We are planning to open additional locations and carry out investments in already existing outlets –  with some adjustments. We are actively analysing our needs and capabilities so that the decisions we make translate to the execution of our long-term development strategy and remain immune to unpredictable events. We are aware of the risk of an economic crisis, which is why our decisions must lead to achieving a greater competitive advantage. We are especially focusing on optimising our product offer. Developing our own brands and choosing the best product range from our suppliers enables us to deliver on our promise of low prices without compromising on product quality. Investments in our supply chain as well as our scale allow us to achieve ever better price-to-quality ratios. The development of our service offer connected with full home improvement project support is another key element of our strategy.

It is also important to mention the development of e-commerce which makes it possible for our offer to reach broader groups of clients who often choose this convenient form of shopping. I am convinced that these responsible decisions will allow us to maintain our market-leader position and continue playing an important role in the national economy.