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World’s second biggest café chain coming to ČR

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As of this autumn, café life in the Czech Republic will be richer. The list of global coffeehouse chains that operate on the Czech market through franchising will be extended by the Australian chain Gloria Jean’s Coffees, number two in the sector. The Czech company Asko Nábytek has bought a licence agreement to operate the franchise. Through this enterprise it will be entering a completely new business. Asko Nábytek is the second largest domestic furniture seller.

According to information available to HN, the contract was signed at the end of February and negotiations on where the café will be located are still in the early stages. However, Asko representatives confirm that the first Czech Gloria Jean’s Coffees, which offers mainly licensed coffee drinks and teas, will open its doors by the end of autumn at the latest.

“Already now we are preparing an advertising campaign that will introduce a new coffee trademark in the Czech Republic,” said Ibrahim Erguer, an Asko manager who has been in charge of the project preparation.

For Czech customers, Gloria Jean’s Coffees is basically an unknown term despite the fact that today more than 900 of its cafés are operating in 31 countries around the world, the closest ones being in Hungary and Poland. The company has a franchising agreement with 36 partner companies and after Starbucks it is the second largest café retail in the world, though there is a wide gap between them.

One more in the crowd

Gloria Jean’s Coffees is coming to the Czech Republic at the time when the influx of western café and food chains is culminating and the competition is already big.

The famous American chain Hard Rock Café announced a few days ago that it would open its first Czech branch in the centre of Prague in April. The American restaurant Hooters is also coming to the Czech Republic. According to unofficial sources, the Indian company Cafe Day is also planning to enter the Czech market.

In November, the global café chain Costa Café launched its operation at Prague’s Flora in November and last year also the fast food chain Burger King opened its first restaurant here. Since January 2008, the American giant Starbucks has been serving its coffee in the Czech Republic and the Polish chain Coffee Heaven has been on the Czech market for five years.

“We want to focus mainly on Czech customers, not on tourists. We will be offering our products at reasonable prices,” Erguer said, adding that the average price for coffee should not exceed about CZK 60. Although Asko sees a rosy future for the project, the events of the last few months seem to signal the opposite.

Will there be any market space left?

Starbucks, whose profit on the American market fell by almost two thirds last year, already had to change its plans on further expansion in the Czech Republic. Coffee Heaven is closing one third of its branches in the Czech Republic, and it is also withdrawing from Slovak, Romanian and Polish market is oversaturated. We’ve come up with an analysis, and we are sure that Gloria Jean’s Coffees will find its place here,” Erguer said adding that together with the Czech Republic the café will also be looking for its place in Slovakia with its next destination being Croatia.

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