Case Study of Good Retail: Dino Polska
I listened to this Podcast a month or so ago and was really impressed by the strength and approach of the Dino Polska business model. It is a shining example of a simple but powerful business principles that are repeated time and time again to great effect. The long term view to investing in infrastructure and sustainability as well as a savvy approach to negotiating with local suppliers and the benefits of scale only improve the company’s prospects. This is just a summary of what I have learned from this Podcast.
Dino Polska is a company headquartered in Krotoszyn, Poland, founded in 1999. It operates in Poland and currently has operations in over 2,340 locations across the country. The company’s main activities include retailing and distribution of food and household products. Dino Polska offers a wide range of products and services to its customers, including fresh produce, groceries, and various household items. It does not have any specific brands associated with its operations.
Dinos obstacles to success:
The Dino Polska board have demonstrated great leadership during the significant financial, pandemic and geo-political headwinds.
- High inflation in Poland
- Coming out of Covid
- Huge geo political challenges to east
- A market where large international brands are exceeding
How have they done it?
- Smaller retail outlets owned by Mum and Pop formats are going out of business as the next generation don’t want to follow in family business so Dino has bought them up.
- Invested capital goes into re expansion and they have an agressive programme of expansion
- Dino has their own construction company to do store builds and they keep repeating what they know well
- Prices are competitive with competitors
- Customer base is local with customers able to walk to local shops in contrast to us where customers drive their cars. Cost of gallon petrol is $10 rather than $4 in Us
- They know their customers very well
- Owner investor with 51% stake hold
- They own the land they build on rather than renting.
- Focus on local national sourcing rather than international brands. They actively focus on cultivating local relationships with national brands
- Store format is same everywhere and repeatable and focused on meeting 95% of customer needs
- Has it’s own mean business owns butchery
- Focus on sustainability putting solar panels on store roofs
- Vulnerable to Geo political tensions
- Dependent on local suppliers
- Continued growth across the country grown from x to y in z years
- Expand model into neighbouring countries
- Continue doing what they are doing and know well.
- Potential new vertical that could expand to
- Geo political tension in the East
- Dino could fall out with their suppliers
- Inflation could ramp up
- They could stop investing in their cash flow
- Current management team could move on but while owner investor is there this is unlikely
Dino Polska’s strengths lie in its strategic approach. It navigates challenges like high inflation, post-pandemic recovery, and geopolitical tensions by capitalizing on local market understanding and investing in infrastructure and sustainability. The company acquires smaller retail outlets, invests aggressively in expansion, and emphasizes competitive pricing while maintaining a strong understanding of its local customer base. The management of Dino Polska have demonstrated how a strong business can be created and maintained by focusing on the basics of:
- Knowing their customers needs
- Long term perspective i.e. Buying property, building close relationships with local suppliers
- Building sustainable energy sources
- Focusing on expansion within their sphere of knowledge
- Building own stores.
I watch with interest how this company develops and expands in the coming years.