Foreign police raid on warehouse of second biggest online grocer

The second largest online grocer on the Czech market – Rohlik.cz had to suspend operation on Thursday following a raid by the foreign police on the company’s Prague warehouse. It was the second police inspection in the past seven months at the e-shop which is trying to increase its share on the Czech online grocery market, already becoming too tight for ambitious competitors.

Illustrative photo: Czech TelevisionIllustrative photo: Czech Television On Thursday customers of the Czech online shop Rohlik.cz didn’t get their groceries delivered as usual and hundreds of others were not even able to place their orders. Business was interrupted in the morning following a police raid which resulted in the detention of 85 foreign nationals on suspicion of working illegally in the country. According to a police spokesman, who didn’t disclose the nationality of the detained, their work visas had been issued for a different EU country.

The company denies breach of employment legislation and says the workers were hired through an agency. In July last year foreign police found 24 illegal workers from Ukraine at Rohlik, also hired through an agency. According to a police spokesman all of them were later deported.

The founder of Rohlik.cz Tomáš Čupr criticized the police intervention on Thursday and says he plans to discuss further moves with shareholders and lawyers. “We cooperate with the authorities, however the frequency of inspections in recent months has increased and is starting to compromise our business in which the customer comes first,” the company stated on their Facebook page.

A rival firm, Kolonial.cz, says police inspections are frequent on their premises, too, the latest one having taken place just two weeks ago.

Rohlik.cz, which entered the market in autumn 2014, increased its turnover to CZK 960 million (36 million euro) in 2016 year-on-year and expects sales to reach at least CZK 2 billion (75 million euro) in 2017. The service is available to 2.5 million Czechs mostly in Prague and Brno and five other regional capitals.

Whereas in Western Europe, around ten percent of the population regularly shop for food online, in the Czech Republic it is only two percent. Tesco was the first to launch the service in this country in 2012, relying on its dense network of supermarkets.

Czech online grocers are quite reticent about figures. However, last year’s analysis by the Acomware e-commerce consultancy estimated that Tesco remains in the lead with around 50 percent of the market, followed by Rohlik.cz with 30 percent, Košík.cz with 15 percent and Kolonial.cz with a five-percent market share. The last two joined the Czech market in 2015. The overall online grocery shops’ turnover for 2016 is estimated at anything between 2 to 5.5 billion crowns, a tiny share compared to brick-and-mortar supermarkets with sales in the hundreds of billions of crowns.

Even though demand for online grocery shopping grows steadily, the e-shops don’t expand as quickly as they had planned and some areas of the country still remain without coverage. The grocers are failing to reach outside the group of urban early adopters who alone cannot fuel expansion and sustain the whole market.