Competitors

Having learned the cause and effect, Ferdinand took action immediately. Although he looked down on those flour capitalists, he still extended some goodwill, and Volvo added several more brands of flour.

At the same time, he decided to teach Kotei Department Store a lesson, establish his status in the industry, and warn certain people!

Ferdinand's in-depth investigation revealed that although Kotei was a giant in the Austro-Hungarian department store industry, its financial situation was not very good.

They still employed traditional operational models and family-style management, which were increasingly failing to keep up with the times.

The current head was Robert Hurd, an Austrian under 30 years of age. Robert possessed great ambition; he looked down upon the traditional operational model of Kotei Department Store and was determined to forge ahead, leading to a very strained relationship with the corporate management.

However, because it was a family business, most of Kotei's senior management were relatives, including his two uncles and a younger brother, who also held a large portion of the shares.

This entry into the supermarket sector was something Robert had pushed for single-handedly in order to break free from the constraints of the management. Of course, Ferdinand had no interest in figuring out what role those flour capitalists played in it!

Having clarified the situation of his opponent, Ferdinand handed this task over to Franz. To be honest, Ferdinand did not think much of Robert; although he had decent ability, he clearly possessed the young man's trait of being fond of grandeur.

Otherwise, since he knew Volvo's background, he should have known to act with a low profile and pay his respects, rather than charging in directly like a greenhorn as he did now!

Moreover, given the current state of Kotei Department Store, they should not have blindly opened new projects and dispersed their limited energy, but rather focused their efforts on reforming their own management system!

Even if they were to enter, they shouldn't have chosen this time to enter the market, and even if they entered now, they shouldn't have chosen Vienna. This was the time when competition in the Vienna retail industry was at its fiercest, which would consume the limited ammunition Kotei Department Store currently possessed.

Not only did Robert enter the market now, but he also placed his focus on Vienna, opening ten supermarkets at once. The momentum was massive, and it was self-evident who he was targeting!

Among them, two were converted from department stores; their size and the luxury of their renovations could be called the best in Vienna. It was clear they intended to take on the aristocratic supermarket sector as well!

However, Volvo had reached the time for harvest. Since there was support from other regional markets, Ferdinand could afford the consumption, and the first to be eliminated would certainly be the small capitalists.

With the massive entry of Kotei Department Store supermarkets into the market, the atmosphere grew increasingly tense, and it was the large supermarkets that proved unable to withstand the pressure first.

They had high operating costs, and while high customer traffic was originally a good thing—as customers meant profit—now, the more they sold, the more they lost. The small retailers with weak economic foundations were the first to be knocked out!

On May 18, 1884, Qatar Department Store, unable to withstand the prolonged losses, declared bankruptcy, sounding the horn of death.

Within the following week, another supermarket named Philip declared bankruptcy. Then, things spiraled out of control, and supermarkets began closing their doors every few days.

By this time, no one in Vienna could stay out of it; all supermarkets had entered a state of negative profit, with the only difference being how much they were losing.

Volvo was no exception. Even with the lower procurement costs afforded by its massive store network, the several stores in Vienna had now entered a state of loss.

Of the five stores in Vienna, three had monthly losses as high as five hundred pounds, though the two stores catering exclusively to the aristocracy remained profitable!

The newly entered Kotei Department Store supermarkets were in terrible shape; their grand scale meant massive losses. Coupled with Kotei's habit of being extravagant from their department store days, the stores were luxuriously decorated with irrational layouts that wasted a vast amount of space and increased operating costs. The situation was now ghastly to behold.

Ferdinand admitted that Robert was indeed talented; the luxurious decor attracted a large volume of traffic, including a large group of the middle class—truly high-quality customers—and business was booming.

Unfortunately, it was 1884, not the 21st century. The number of middle-class people in Vienna was limited and could not support a large department store, so prices could not be raised!

As for the aristocrats, sorry, but they were not in the same social stratum. Aside from the newly risen upstarts, the old-money aristocrats still looked down on them!

In order to seize the market, Kotei had no choice but to follow suit and lower prices, or rather, they had been discounting since the day they opened. They were losing more every day, with no end in sight.

Franz was no pushover either. He first mobilized the employees of the Shineway Food Group to go shopping at Kotei Department Store. Thousands of people swarmed in, instantly bringing Kotei super-high popularity.

The products they purchased were pre-determined, and then secretly transported to other cities in Vienna to be sold through Volvo stores to earn the price difference. For a time, they even made a handsome profit, which compensated for the losses of the Vienna stores.

Robert was in a very bad mood now; over the course of a week, the vase in his office had been replaced three times.

Originally, seeing that department store supermarkets had good prospects, he had rushed in with the support of the Hungarian flour capitalists, only to begin a journey of losses.

Losses were losses; Robert had been mentally prepared for them as the initial cost of building popularity. However, he had not expected business to be this good, and consequently, for the losses to be this massive.

Of Kotei's ten stores in Vienna, the smallest loss last month was over eight hundred pounds, and the largest flagship store had set a record loss of three thousand pounds. It was only because Kotei had a deep foundation that they hadn't already collapsed and exited the competition like an ordinary person!

Currently, the goods in the department store supermarkets were all being sold at a five percent discount off the factory price. This was something Volvo had started first, and then all capable merchants had followed suit.

If operating costs were added, the loss margin was basically around ten percent of sales. Now, the more they sold, the more they lost.

Kotei Department Store could now proudly announce that it was a giant among Vienna's department store supermarkets, with the number one market share, far leaving the second-ranked Volvo behind.

Precisely because of this, the atmosphere at Kotei Department Store was very wrong. Even with a majority stake, Robert's life was not easy. Last month, Kotei Department Store's losses reached as high as fifteen thousand pounds, and there were signs of further increases this month.

Even the profits from the department store side could not fill this bottomless pit. At this point, it was no longer a matter of simply wanting to quit. In total, Kotei had already invested eighty thousand pounds into the department store supermarket project.

Robert decided to have a showdown with the shareholders. Since things were already like this, he decided to let it all go. Either they abandon the eighty thousand pounds invested so far, losing everything and leaving Kotei Department Store severely wounded, or they continue to invest, squeeze out a group of competitors first, and then wait for the market to return to normal to earn back the lost money!

In the conference room of Kotei Department Store, the atmosphere was very stifling. The dozen or so people attending the meeting were all puffing away, and soon the room was filled with smoke.

"Alright, since everyone is here, let's begin today's meeting." Robert had lost his usual flair.