DE4CC0DE-5FC3-4494-BCBF-4D50B00366B5
Retail

A Symbol Of Resilience – ESM Meets Ukraine's ATB

By Editorial
Share this article
A Symbol Of Resilience – ESM Meets Ukraine's ATB

Ukrainian retail market leader ATB has emerged as a beacon of strength and perseverance, strategically addressing the unique challenges posed by geopolitical tensions and food crises. Nina Mishchenko meets ATB Corporation CEO Borys Markov. This article first appeared in ESM’s January/February 2024 edition.

ATB-Market, a leading Ukrainian retail chain with more than 1,000 stores, is a testament to resilience and innovation in the face of challenging times. With a robust presence across Ukraine, ATB supermarkets have become a cornerstone of the country’s food security, navigating geopolitical tensions and global health crises.

Borys Markov, chief executive and chairman of the board of directors of ATB Corporation, joined the retailer in 1998 – initially its legal department before heading up that division, and subsequently being named CEO of the ATB-Market chain. Markov spoke to ESM about how ATB has navigated the complexities of war and a global pandemic, emerging not just as a retail giant, but as a symbol of adaptability in challenging times. 

From the avant-garde features of the retailer’s new-format stores to its ventures into the digital landscape, ATB continues to redefine the retail experience, creating a cutting-edge ecosystem that sets the stage for a truly customer-centric future. 

In addition, the group’s new-format ‘чорні АТБ’ (Black ATB) stores, resilience centres and expanded range of premium products provide customers with a modern and comfortable shopping experience. 

ADVERTISEMENT

ESM: How does ATB’s discount store model differ from well-known European discounters, like Aldi and Lidl?

Borys Markov: Indeed, when creating our unique discount store format, it involved a careful study of well-known European retailers’ operations, including the layout of the sales floor, achieving maximum convenience and comfort during shopping, and so on, however, it cannot be considered a direct copy or imitation, as we also took into account our extensive experience in the Ukrainian food retail market. Many features that are now standard for any store were tested – or even invented – in ATB discount stores. 

The distinctive feature of our store format is in offering a vast range of guaranteed fresh products and quality essential goods at fair prices. Through the optimisation of various business processes, as well as exclusive agreements with manufacturers and suppliers, we can offer prices that are essentially the first cost after production. On the shelves of our discount stores, you can even find products priced lower than what the manufacturer sets in their flagship stores.

Who is the typical ATB customer?

ATB’s policy regarding its customers has remained unchanged for over 30 years of the company’s existence. We traditionally consider our customers a fully-fledged business partner, and our approach reflects that.

It doesn’t matter who comes to one of our discount stores or purchases in the online store. For us, it is always an honour and recognition of our work. Every day, we strive to provide our customers with the highest level of service and create comfortable conditions for them.

ADVERTISEMENT

The shelves of ATB discount stores feature products from all price categories. This is evident, for example, in the range of our private labels. 

The premium segment is represented by the ‘Deluxe Foods & Goods Selected’ brand, the middle part by the ‘Своя лінія’ (Own Line) brand, and the most budget-friendly products are offered under the ‘Розумний вибір’ (Smart Choice) brand. Therefore, everyone can find fresh products in ATB stores, according to their taste, and at fair prices.

According to sociological research companies, over 95% of Ukrainians have a positive shopping experience in ATB discount stores. The number of regular customers currently exceeds four million and continues to grow.

How did ATB meet the full-scale war, and what new challenges did it overcome during this time?

At the onset of the war, significant difficulties arose with the uninterrupted supply of products, as many manufacturers and carriers either evacuated facilities or suffered losses. Some were unable to unload already-produced goods. 

ADVERTISEMENT

Simultaneously, there was almost a panic demand among consumers for specific categories of products, such as long-shelf-life items. Consequently, we had to rapidly find local producers – resulting in over a hundred new agreements and contracts – establish new logistics chains, and explore alternative ways to supply imported products.

In terms of losses, an accurate calculation is still ongoing, but more than 200 stores were destroyed during the conflict or ended up in temporarily-occupied territories. The multi-temperature warehouse centre in the Kyiv region, which supplied products to Central Ukraine and northern areas, was nearly completely destroyed. The current estimate of losses is already in the billions of hryvnias.

The most painful and irreparable losses are the personnel. As of now, over 4,000 employees have joined the ranks of the armed forces of Ukraine, and, unfortunately, some of them have suffered severe injuries or, worse, will not return home alive. These are losses that cannot be quantified. It is regrettable to acknowledge, but this painful toll continues.

How has the war affected the expansion plans of the group? How many stores have you opened since the conflict started, and what are the plans for 2024?

Before the full-scale war, the company opened over 120 new stores annually in various parts of Ukraine, with approximately 80 stores undergoing annual modernisation and renewal. Unfortunately, the war has altered these plans. 

ADVERTISEMENT

Before the full-scale invasion, there were 1,322 discount stores in operation.

Currently, the ATB chain consists of 1,196 supermarkets in 305 communities across Ukraine. This stands as an absolute record in the domestic retail industry. ATB supermarkets were among the first to resume operations in the de-occupied territories of Kyiv, Chernihiv, Sumy and Kharkiv. 

In 2023, we opened 20 new discount stores and restored 40 war-damaged stores. For 2024, we aim to open 60 new stores and restore at least 30 discount stores that suffered damages.

In which categories did you encounter the most considerable difficulties with supply security, and how did you overcome them?

We have managed to build a resilient model that can withstand any force majeure situation, showcasing the unwavering strength of Ukrainian society. Evidence of this is the consistent growth in the amounts of taxes and fees paid by ATB to all levels of budgets, now for the seventh consecutive year.

The blockade of Ukrainian ports necessitated adjustments in ATB’s logistics. We partially shifted to ports in Türkiye and Romania, followed by increased reliance on road transport.

The company has built one of the most extensive logistics infrastructures in the country. ATB owns a substantial fleet of vehicles – more than 750 trucks – helping to compensate for the severe shortage of transport and drivers from carriers and manufacturers at the beginning of the war, ensuring uninterrupted access for the population to guaranteed fresh products and essential goods.

How has the border blockade with the EU from Poland affected you?

Retail is inherently dynamic and requires maximum readiness to respond efficiently to any force majeure situations and potential challenges. Our professional team has already dealt with numerous similar cases, such as the stringent coronavirus lockdowns or port blockades at the war’s outset.

While border blockades for carriers and suppliers have certain consequences, our main goal is to ensure they do not impact the country’s food security. We maintain reserves in warehouses, distribution centres and stores, to provide uninterrupted access to a wide range of products.

In case of extreme necessity, we always have a contingency plan – a Plan B – to replace specific products swiftly. Even during peak demand for long-shelf-life products, our store shelves remained fully stocked, in their usual places.

What has proven to be the most challenging aspect since the beginning of the war?

The full-scale invasion became the biggest test in the entire existence of ATB. As the country’s largest retailer, we could not afford to prepare for even the worst-case scenarios. 

Of course, it was impossible to be 100% prepared for war, but, in 2014, we had already experienced the annexation of Crimea and the temporary occupation of the Donetsk and Luhansk regions. Therefore, we clearly understood which aspects needed to be prioritised. We retained all the necessary skills from that time, and the coronavirus pandemic served as a crash test. 

We refined manual control mechanisms, operational delegation based on circumstances, and board of authority, allowing us to accelerate the decision-making process. What might have taken weeks in peacetime or pre-pandemic times can now be resolved online within hours – or even faster, if necessary – without compromising the quality and effectiveness of the decision made.

What did this experience teach you as a top manager? How does the experience of these crises help the chain grow and contribute to your personal growth?

The experience of crisis times taught me effective communication across various channels – horizontally, vertically, diagonally, in small groups, etc. It led to rapid responses to changes – making urgent decisions that can significantly impact the situation. ATB became an example of the resilience of patriotic business. 

Today, ATB is a stronghold of Ukraine’s food security and a significant source of revenue for various levels of government. Alongside this, we launched an unprecedented charitable campaign, supporting the armed forces of Ukraine, volunteer formations, medical institutions, volunteer organisations, displaced persons, and those affected by rocket attacks.

When did you and your team realise that a format change was necessary? And can you explain the development of the ‘Black ATB’ concept?

In 2001, ATB chain stores began adopting a modern look, introducing the self-service format that is familiar today. The first such store opened in the suburbs of Dnipro in March. Over many years of daily improvement – sometimes shelves, cash registers, refrigerators and products were rearranged in specific stores overnight, so each morning the supermarket looked different – we created our unique discount store format.

ATB is traditionally a supermarket with a wide range of guaranteed fresh products and quality essential goods – more than 3,500 SKUs – at fair prices. ATB always operates with a minimal fixed markup, has exclusive contracts with manufacturers, and a significant range of private-label products and imports. It allows us to offer the customer the first price after the manufacturer, which is 10% to 15% lower than the market average.

The year 2016 commenced a new era for the company – a total renewal. In Dnipro, the first supermarket with the updated concept opened and was called ‘Black ATB’ by customers because the sales floor was designed using black colours. This supermarket is modern, stylish, maximally comfortable, and convenient and features the latest equipment, with an emphasis on energy efficiency. 

Currently, all new stores or those undergoing modernisation have this format. They are designed and built with all modern requirements, including the highest energy conservation standards, comfort, safety, etc. 

What features of the new format are not present in traditional discount stores in Ukraine?

The new-format ATB discounters feature a dedicated section for in-house bakery, while each store also has a special zone with modern vending machines, where customers can manually prepare natural coffee or squeeze fresh fruit juice. They also have an expanded range of premium products.

During prolonged power outages, the stores have created ‘resilience centres’, where customers can recharge their phones, flashlights, or any electronic gadgets for free. They have powerful autonomous generators, to ensure uninterrupted access to guaranteed fresh products. This modern equipment automatically starts, reaches project capacity, and restores power within minutes. Most customers may not be aware of this.

What experiments and new technologies has the chain implemented?

As a long-standing leader in the Ukrainian retail sector, we constantly stay at the forefront of innovation, implement bold solutions, and carry out ambitious projects that later set trends for the entire domestic retail industry. This was previously the case with energy conservation and environmental initiatives, such as abandoning harmful plastics and recycling used batteries.

Each project becomes a unique experience, converting into something new, unconventional, impressive and enjoyable. The decision to open an online store was accelerated by societal demand during the coronavirus pandemic. Eventually, customers quickly recognised the advantages of such purchases, and the turnover of the online store continued to grow after the end of the pandemic.

The company swiftly adopts cutting-edge digital solutions. Among the unconventional digital innovations is the AtBot intelligent assistant. Since 2019, it has effectively communicated with millions of customers on popular messaging platforms like Viber and Telegram. This technology replaced the outdated and discontinued paper booklet for complaints and suggestions. Additionally, it can even schedule interviews for job applicants.

A new addition to the Ukrainian market was the introduction of co-branded ATB Visa payment cards – in both plastic and digital formats – with top banks in the country participating: Raiffeisen, Ecobank, ABank, Monobank and Oschadbank.

One of the recent bold projects of ATB last year was the implementation of assistant robots – Delivery Cobots – in stores. This technological wonder is currently undergoing testing and can be found in several chain stores in Dnipro and Kyiv, where they attract considerable customer interest. 

The Delivery Cobot has a main screen and several shelves built in – it can assist customers by providing information on specific products, prices, or promotional offers and physically serving them. These robots circulate in stores, carrying ATB’s most in-demand and popular own-brand products.

Elsewhere, the ‘ATB Arena’ mobile app game, spanning three seasons, set records for the number of app downloads – over three million – and the number of game cards issued to customers – over 100 million pieces. The project ranked high in the Ukrainian App Store and Play markets.

We adhere to a long-term strategy that involves growing the business using advanced European technologies, concepts, and store development practices. 

Plans include creating a comprehensive ATB ecosystem for the customer, incorporating all modern services and technologies, from fintech projects, loyalty programmes and online purchases to co-branded projects with partners from various industries. 

Get the week's top grocery retail news

The most important stories from European grocery retail direct to your inbox every Thursday

Processing your request...

Thanks! please check your email to confirm your subscription.

By signing up you are agreeing to our terms & conditions and privacy policy. You can unsubscribe at any time.