exist. The second stage lasted from 1997 to 2001, i.e. for the period of the highest increase of large–scale outlets. At that time, customers orientated themselves mainly according to product prices. Cheap goods were bought in discount outlets or in hypermarkets. On the contrary, the third stage, lasting since 2001, is already characterised by customers preferring their own favourite outlet or chain of hypermarkets. Customers are more experienced and require a price corresponding to the product quality. In this stage of the development of shopping behaviour, shopping centres offering to their customers rich shopping and entertainment possibilities play an important role in the decision process.
According to the study of J. Spilková (2003), who investigated by the method of observation the movement of customers in a large shopping centre in Prague, Czech customers may be included into one of three groups according to their shopping behaviour. The first type of behaviour is typical for those customers who do only specific shopping in the shopping centre, i.e. they visit only a single outlet (usually the hypermarket). Customers of the second type follow the modern trend of experience/fun shopping and conceive their stay in the shopping centre as a leisure time activity, going logically through all the outlets. The third type is a combination of both the preceding types; the customer visits both the hypermarket, and the other outlets in the shopping gallery.
The results of comparative studies show that in the central Europe, it is the Czech society that changed the most. Among the countries of Visegrad group (V4), it manifested the most significant inclination to hypermarkets and this inclination has been remaining high in the long term (35%). In a long–term horizon, we also register low preferences for small outlets, representing the independent domestic commerce and currently ranking among the least popular with the Czech population (20–25% of preference).
Shopping in hypermarkets and large shopping centres has become so popular with the Czech population over the last years that there is even a feature film depicting this phenomenon that illustrate the transformation of the Czech population into consumer society. The story takes place on a background of the starting hypermarket mania in the Czech Republic and investigates at the same time the impact of promotion on the Czech con-sumer. It appeared at last that the fiction about the existence of a new hypermarket “Czech Dream” was perfect and many thousands of customers willing to shop succumbed to promotion in such degree that they gathered, a May day of 2003, on a green field in the Prague district of Letňany in order to show to hundreds of thousands (maybe millions) cinema and TV viewers that words as supermarket and hypermarket, in connection with a good promotion, have almost a “magical” attraction. The very ending of the film shows a crowd of thousands of customers running towards a scene imitating the hypermarket – a large colour curtain fixed on a metal structure (see: Figure 1).
Reasons of changes of shopping behaviour
Decisive changes in shopping behaviour of the Czech population took place with the arrival of supranational commercial chains in the second half of the 1990s. This stage of the transformation of the Czech retail was – and still is, since it is going on – characterised by a wave of a massive expansion of foreign companies in the Czech market. A dynamic expansion of the net-work of large–scale outlets, shopping centres and other specialised outlets (in particular clothes, drugstores) in dozens of Czech towns is a significant sign of this process. More than 170 hypermarkets and almost 50 large–scale shopping centres were operating in the territory of the Czech Republic at the end of 2004. To this number, we should add around 700 supermarkets, 400 discount outlets as well as several dozens of specialised large–scale outlets selling electric appliances, furniture and “DIY” products. German commercial concerns (Schwarz, Rewe, etc.) and other large commercial chains (e.g. Ahold, Tesco, Carrefour) have assumed leading role in the development of modern large–scale retail network.
From the regional point of view, the highest penetration of large–scale outlets is observed in heavily urbanised areas of the Czech Republic with sufficient buying potential, defining the spheres of interest of commercial chains for their further activities (determining the presence of the individual selling formats). If we simplify, we can say that from the point of view of buying power, the territory of the Czech Republic may be divided into the
Figure 1. Non–existing hypermarket „Czech Dream”
Source: http://www.czech–tv.cz/specialy/ceskysen/index.php?load=fotogalerie
“rich” West, where regions exceed the level of 1.00 of the Republic average (Prague: 1.33), and the “poor” East, consisting from regions with a below–
average buying potential caused by persisting economic problems. Calculated per 1000 inhabitants, the regions with the largest selling area at the beginning of 2005 were Ústí nad Labem Region (120 m2) and Moravian–Silesian Region (113 m2), followed by Plzeň Region (98 m2) and Prague (89 m2), whereas the all–republic average was 80 m2. If compared with year 2002, when the average of the Czech Republic was 62 m2 of selling area of hypermarkets per 1000 inhabitants, the level of penetration of hypermarkets increased by more than 25 %1.
Whereas hypermarkets reach almost the whole market space within the residential system of the Czech Republic (population threshold for the localisation of a hypermarket is approximately 40–50 thousands inhabitants in the centre and upcountry), shopping centres are situated only in the largest cities. The most shopping centres are located in the capital city Prague (12), followed by Brno, the second largest city of the Republic (6).
The other large cities have two shopping centres on average (Figure 2). The minimum required population potential for the localisation of shopping centres has stabilised for a longer time at 100 thousands potential customers within the gravitation radius of the centre.
Figure 2. The largest shopping centres in regions of the Czech Republic in 2005 Sourece: Own studies.
1 Source: Incoma Research + GfK Praha (2005)
Shopping centres – new spatial element of the transformation of shopping behaviour
The first large shopping centre in the Czech Republic was opened in Prague in 1997 (Centrum Černý Most). There are currently fifty of them and others are rapidly growing (four to six per year). Over the last years, shopping centres have become very popular. They are visited by millions of custom-ers. For instance, the shopping centre Avion Shopping Park in Brno has around seven millions of customers per year and the shopping complex Nový Smíchov in Prague is visited by up to fifteen millions of customers (K. Vitvarová–Vránková, 2005, p. 103).
According to the research Shopping Mall 2004 conducted by companies Incoma Research and GfK Praha, 17% of people in large Czech cities visit shopping centres several times a week, one third once a week. As a result, approximately one half of the urban population visit one of Czech shopping centres at least once a week. More than one quarter of people spend two and more hours in a shopping centre during a single visit (Table 1). Reasons for which people prefer a certain shopping centre include in particular “pleasant atmosphere”, whereas „overall advantageous prices” are mentioned only in the second place. Most visitors do not limit their visit to shopping in the hypermarket. The other outlets in shopping centres as well as a possibility to
Source: http://www.gfk.cz
Table 1. Customers in Czech shopping centres (in % of customer population in towns)
spend the leisure time agreeably are also popular. There is already a mar-kedly profiling group of people visiting shopping centres for a number of non–commercial activities, in particular for cinema–going, visits of cafés or restaurants or for practicing a sport.
City of Olomouc: shopping centres and issues of shopping behaviour Olomouc is a corporate town and the seat of Olomouc Region, established on 1 January 2000 as one of fourteen regions of the Czech Republic. The city itself is the fifth largest city of the Czech Republic (102 thousands inhabit-ants). The city is situated in the central part of Moravia, i.e. it has a strategic location from the point of view of transport and logistics. This feature is exploited also by foreign commercial chains locating in the city and its surrounding their distribution centres supplying outlets in the eastern part of the state territory.
Since 2002, Olomouc has been among the large Czech cities with a fun-ctioning concept of a regional shopping centre in its territory. Obchodní centrum Haná, located in the suburb (south–western periphery) consists of a large hypermarket Carrefour and dozens of specialised outlets. The total selling area of the centre comprises 12 thousands m2. In 2004, another large shopping centre Olympia was opened in the territory of the neighbouring community of Velký Týnec (south–eastern periphery) with a final selling area of 30 thousands m2. There is again a central hypermarket (Hypernova), operated by a supranational commercial chain (Ahold). A third concept of the shopping centre, called Olomouc City, was put into service in September 2005 (north–western periphery) and extended the existing selling capacity of hypermarket Globus by other 25 thousands m2 (40 thousands m2 in total).
The centre houses a multiplex cinema with seven theatres, surgeries and 70 more sales units located in the shopping gallery. For the present, this is the largest project in the field of shopping centres in the region of the central Moravia.
The development of the network of large–scale outlets in the territory of Olomouc brought a substantial modification of shopping behaviour of its inhabitants, including the upcountry. This was confirmed by a first out of a number of consumer investigations, carried out in April 2003 (Z. Szczyrba, 2004). Answers positively evaluating the entrance of foreign commercial chains in the territory of the city clearly prevailed in a set of 336 informants who were questioned about the level of commercial offer, the expenses or the frequency of shopping in Olomouc large–scale outlets. According to the investigation, most informants currently shop in one of type large–scale outlets whereas shopping in smaller outlets loses its former position and correlates with data for the whole Republic (see above). Shopping activities move more and more outside traditional shopping areas, usually into suburban localities.
The investigation also observed which of Olomouc hypermarkets is often or
Distance
ra Shopping te several times
a week
at least once a week
several times a month
at least once
a month occasionally
0-10 km 23.3 15.0 20.9 17.0 23.8
11-20 km 3.6 10.7 32.1 25.0 28.6
21-50 km 6.2 3.1 18.8 21.9 50.0
51 km 15.8 10.5 15.8 5.3 52.6
Total 17.6 12.8 22.4 18.2 29.0
Source: Investigation of the Department of Geography of the Faculty of Natural Sciences of Palacký University, Olomouc, 2005.
Table 2. Basic parameters of the radius of the shopping centre Haná Olomouc (in % of customer population)
Table 3. Shopping Centre Haná Olomouc – relation between the shopping rate and the distance from the shopping centre (in % of customer population)
Source: Investigation of the Department of Geography of the Faculty of Natural Sciences of Palacký University, Olomouc, 2005.
at least occasionally visited by the informants. It appeared that only a small part of them do not have a practical experience with this type of shopping (14%). Many even stated several hypermarkets simultaneously, located within their active information field, which they occasionally visit.
In spring 2005, the shopping behaviour in Olomouc was further investi-gated by a questionnaire. This investigation should determine significant signs of shopping behaviour of customers of the commercial centre Haná. In total 696 informants in a representative structure were questioned. Questions included in the questionnaire focused particularly on the determination of the shopping radius whose selected geographical parameters are docu-mented in Tables 2–3. It appeared at last that customers show a consider-ably high willingness to visit this shopping centre. Almost 60 % of custom-ers spend approximately 1 hour in the shopping centre Haná and other 30 % spend there 1–2 hours. Most customers arrive from a distance up to 10 kilometres, but longer distances are not exceptional.
Conclusion
Internationalisation and globalisation in the retail branch in the Czech Republic caused a number of changes. Changes of shopping behaviour of the Czech population are particularly significant in this respect. As we can see, a great number of customers like shopping in modern large–scale outlets and recently also in large shopping centres, representing for them not only shopping possibilities but also a possibility of entertainment and a certain kind of recreation and relaxation. Rapid changes in shopping behaviour are so much apparent that they were depicted even in a feature film, illustrating the transformation of the Czech population into consumer society on an example of a fictitious hypermarket. This is an interesting sociological phenomenon, inspiring, among other things, possibilities of the investigation of its spatial aspects.
References:
• Schiffman L. G., Kanuk L L., 2004, Nákupní chování. Computer Press, Brno.
• Spilková J., 2003, Nový fenomén: nákupní centrum a utváření nákupního chování spotřebitelů v transformačním období. Geografie, sborník České geografické společnosti, year 108, no. 4, p. 277–288.
• Szczyrba Z., 2004, Globalized retail structures in the city of Olomouc (selected issues of branch, regional and social organization), Acta Univer-sitatis Palackianae Olomucensis, Geographica 38, Olomouc, p. 85–91.
• Vančura M., 2004, Foreign direct investment in the Czech Republic [in:]
J. Łoboda, S. Ciok (eds.) Przekształcenia regionalnych struktur funkcjonalno–
przestrzennych, VIII/2, Instytut Geografii i Rozwoju Regionalnego, Uniwersytet Wrocławski, Wrocław, p. 201–211.
• Vitvarová–Vránková K, 2005, Nakupování hrou, Týden, year 12, no. 14, p. 102–106.
• Vysekalová J., 2003, Jak to bylo s Českým snem? Marketing & Komunikace, no. 4, p. 8–10.
• Vysekalová J., 2004, Psychologie spotřebitele. Jak zákazníci nakupují, Grada, Praha.
• http://con–praha.cz
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Introduction
It is well understand now that transition from plan to market economy requires three important types of reforms: liberalization, institutional reform and stabili-zation. Freeing trade and prices would introduce competition and market prices, while establishment of private ownership, as a key market institution, would in-troduce profit–oriented incentives within the firm. At the centre of transition is the challenge of reallocating resources and restructuring existing enterprises. The aim of the paper is to show that the lack of economical reforms in Belarus, ante omnia of institutional framework reforming, is leading to constraint on the growth of new sectors that should be able to replace the inefficient state sector, and pro-vide real economical development.
Transition Period: Restructuring and the Role of Institutions
The process of transition to market can be presented as a transformational tetra-hedron: liberalization, institutional reforms and stabilization are the basis of effi-cient restructuring of the economy (Figure 1). The globalization of world economy should be taken in to account: it influences both on the system transformation process in certain country by means of financial and political support and on the restructuring of their production structure via world competition and foreign in-vestment.
If quantitative and qualitative analysis of industrial restructuring directions and effects in transitive countries has been made, the liberalization and stabiliza-tion influence on restructuring could and in fact has been carried by many scien-tists (S. Djankov and P. Murrell, 2000; V. A. Bessonov, 2001), to estimate the role of institutional factor was more complicated. This is not only the problem for former planning economy countries. Ronald H. Coase (1991) in his lecture to the memory of Alfred Nobel said: “These ex–communist countries are advised to move to a market economy, and their leaders wish to do so, but without the ap-propriate institutions no market economy of any significance is possible. If we knew more about our own economy we would be in a better position to advise them”.
Institutional Barriers for Industrial Restructuring
Uladzimir Valetka
According to D. C. North (1993), “institutions are the humanly devised con-straints that structure human interaction. They are made up of formal concon-straints (rules, laws, constitutions), informal constraints (norms of behavior, conventions, and self imposed codes of conduct), and their enforcement charac-teristics. Together they define the incentive structure of societies and specifically economies”. Therefore, institutions form the incentive structure of a society and the political and economic institutions, in consequence, are the underlying deter-minant of economic performance.
It was R. Coase (1960) who made the crucial connection between institutions, transaction costs, and neo–classical theory. The neo–classical result of efficient markets only obtains when it is costless to transact. Only under the conditions of costless bargaining will the actors reach the solution that maximizes aggregate income regardless of the institutional arrangements. When it is costly to transact then institutions matter.
The costs of transactions became mach higher in the unstable transition econo-mies. All the more the old (and weak as a rule) incentive structure of economy is broken, but new is absent. Thus there is a great possibility that enterprises keep to function in not efficient way or the government could try to decrease high transaction costs in too expensive way. That is why institutional reforms are the key moment in industrial restructuring process in transition period.
So institutions provided a crucial underpinning to market–capitalism devel-opment but the process of building these institutions is fraught with difficulties.
This was not at the forefront of policy discussions during the early years of
tran-Figure 1. Basic elements of transformation process Source: Author’s own study.
sition. Stabilization, privatization, and liberalization dominated the agenda. Gradu-ally the focus has changed, spurred by studies showing the hefty costs of ineffi-cient state administrations and corruption (D. Kaufmann, 1994) and by the recog-nition that the relatively poor performance of the CIS countries was not easily explained by differences in more standard reforms. Some scholars have also as-cribed the disappointing Czech economic performance to a lack of attention to corporate governance and the financial system during mass privatization (J. C. Coffee, 1996). Later, in contrast to the early neglect, institutions came in vogue (O. Blanchard, M. Kremer, 1997; J. E. Stiglitz, 1999; K. Hoff, J. E. Stiglitz, 2002). But up to now some authors state that the enterprise level evidence on the link be-tween institutional reform and enterprise restructuring is still thin (S. Djankov, P. Murrell, 2000). At the same time they admit that cross–sectoral or cross–county empirical results (e.g. S. Johnson, D. Kaufmann, A. Shleifer, 1997; O. Blanchard, M. Kremer, 1997) are stronger.
An influential paper by O. Blanchard and M. Kremer (1997) has claimed that the absence of contract enforcement mechanisms was a primary factor causing the dramatic fall in output in early transition in the CIS. They hypothesize that weak contract enforcement will be more critical for those enterprises whose in-put–supply relationships are more complex, a prediction that also follows from the observation that the supply of information and the coordination of decisions was a central task of the now defunct planning apparatus. There are several pa-pers that test this hypothesis using enterpriselevel data. J. Konings and P. P. Walsh (1998) show statistically significant evidence supporting this prediction for Bul-garia, an insignificant coefficient with the predicted sign for Estonia, and a coeffi-cient with the wrong sign for the Ukraine. D. Marin and M. Schnitzer (1999) pro-vide epro-vidence in support of the hypothesis for the Ukraine, while F. Recanatini and R. Ryterman (2000) fail to support it for Russia.
Institutional reform can lead to improved enterprise efficiency when legal rules are effective in structuring economic transactions and resolving disputes. Eco-nomic agents can then turn to public bodies, such as the courts and the police, to enforce those rules. Although a large proportion of transactions everywhere in the world are enforced through private mechanisms, such as reputation, these mechanisms are sometimes costly, especially if the parties feel the need to resort to private force (J. Hay, A. Shleifer, R. Vishny, 1996). Institutional reforms may therefore enhance enterprise restructuring if the legal system replaces more costly private mechanisms of supporting transactions. Focusing on private Vietnamese firms, J. McMillan and Ch. Woodruff (1999) document the nature of enforcement of trading relations when formal institutions are virtually non–existent. Only 9 percent of Vietnamese managers thought the courts could enforce contracts, in contrast to 58 percent of Russian managers and 55 percent of Ukrainian firms
Institutional reform can lead to improved enterprise efficiency when legal rules are effective in structuring economic transactions and resolving disputes. Eco-nomic agents can then turn to public bodies, such as the courts and the police, to enforce those rules. Although a large proportion of transactions everywhere in the world are enforced through private mechanisms, such as reputation, these mechanisms are sometimes costly, especially if the parties feel the need to resort to private force (J. Hay, A. Shleifer, R. Vishny, 1996). Institutional reforms may therefore enhance enterprise restructuring if the legal system replaces more costly private mechanisms of supporting transactions. Focusing on private Vietnamese firms, J. McMillan and Ch. Woodruff (1999) document the nature of enforcement of trading relations when formal institutions are virtually non–existent. Only 9 percent of Vietnamese managers thought the courts could enforce contracts, in contrast to 58 percent of Russian managers and 55 percent of Ukrainian firms