ACROSS: MR. HIESE, AS A GROCERY-FOCUSED RETAILER, KAUFLAND HAS TRADITIONALLY RELIED ON LARGE-FORMAT STORES WITH EXTENSIVE ASSORTMENTS — FORMATS THAT WERE HISTORICALLY DEVELOPED MAINLY ON THE OUTSKIRTS OF CITIES. IN RECENT YEARS, HOWEVER, THE COMPANY HAS OPENED SEVERAL FLAGSHIP STORES IN CENTRAL URBAN LOCATIONS. HOW IMPORTANT IS URBAN RETAIL FOR KAUFLAND TODAY?
MICHAEL HIESE: In my view, describing Kaufland purely as a large-format retailer misses the point. We are not a typical hypermarket operator. With an average sales area of around 4,300 sq m, our stores sit somewhere between discounters and hypermarkets. Our concepts start at roughly 2,000 sq m, which makes us far more compact and flexible than many people assume.
Urban retail is therefore highly relevant for us — even though we don’t follow a classic high-street strategy. Our goal is to be present where people live, work, and spend their time. Increasingly, that means integrated urban locations rather than greenfield sites. With our flexible concepts, we can develop solutions for these environments. Ultimately, what matters most is being where people are active — or ideally, where they live.
ACROSS: YOU OPERATE IN EIGHT COUNTRIES — GERMANY, THE CZECH REPUBLIC, POLAND, SLOVAKIA, CROATIA, ROMANIA, MOLDOVA, AND BULGARIA. WHERE DO YOU CURRENTLY SEE THE GREATEST POTENTIAL, PARTICULARLY FOR URBAN LOCATIONS?
MICHAEL HIESE: We see growth potential across all of our markets, especially in Central and Eastern Europe. Countries such as Poland and Romania have shown strong economic growth for years. Poland, in particular, is one of the fastest-growing economic regions in Europe. In larger cities, there are still clear opportunities to further densify our store network.
When we first entered these markets, many inner-city industrial sites were unavailable for development — either because they were still in use or because ownership structures were unclear. That has changed. Many of these areas are now being revitalized and are becoming viable for retail use, which clearly works in our favor.
At the same time, we’re seeing greater openness from municipalities and other stakeholders to reintegrate retail into urban, mixed-use environments. That creates additional opportunities.
This interview was published in ACROSS Issue 1|2026
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ACROSS: URBAN PROJECTS ARE FAR MORE COMPLEX THAN GREENFIELD DEVELOPMENTS AND OFTEN COME WITH STRICTER REQUIREMENTS. WHERE DO YOU SEE THE BIGGEST CHALLENGES?
MICHAEL HIESE: There’s no question that the level of complexity is higher. Retail depends on foot traffic — this was true centuries ago and remains true today. An urban location has to be accessible: on foot, by public transportation, and also by car. As a grocery retailer, reliable daily deliveries of fresh products are essential. Our business depends on that.
On top of that, there are real estate–specific issues such as structural load capacities in redevelopment projects, heritage preservation requirements, delivery zones, and noise emissions. And then there’s the number of stakeholders involved — from residents and local authorities to political decision-makers. Success ultimately depends on everyone pursuing a shared goal and being willing to compromise.
Because — and this brings it full circle — a strong retail location generates traffic and footfall that can lead to tension. The real challenge is aligning competing interests.
ACROSS: WHICH OF YOUR URBAN PROJECTS BEST DEMONSTRATES HOW THESE CHALLENGES CAN BE SUCCESSFULLY MANAGED?
MICHAEL HIESE: A great example is the Central Sofia Market Hall, the Halite, where our Bulgarian colleagues have revitalized an iconic historic building subject to strict heritage preservation rules. Parking options at the site are limited, and logistics are significantly more complex than at most of our locations. Through close coordination with heritage authorities — up to the ministerial level — as well as with the city and neighboring stakeholders, we were able to deliver a project that is both economically viable and of high urban quality.
ACROSS: HOW DO YOU APPROACH THE CONCEPTUAL DEVELOPMENT OF URBAN LOCATIONS?
MICHAEL HIESE: It always starts with a detailed analysis of the catchment area and customer demand. At the same time, opportunity plays a major role — there has to be a suitable site available. When those two elements come together, our modular concepts allow us to deliver even highly challenging locations.
In integrated urban areas, the share of walk-in customers is higher, but accessibility for drivers still matters. We adjust both the assortment and the layout accordingly. Convenience products, foodservice, and concession partners become more important.
Our urban stores are designed more around dwell time, immediate consumption, and neighborhood integration than traditional formats. At the Halite in Sofia, for example, we integrated four food concepts, whereas a typical Kaufland store usually has one or two.
ACROSS: HOW DOES THE ARRIVAL OF A LARGE RETAIL FORMAT AFFECT LOCAL RETAILERS? SMALLER BUSINESSES ARE SOMETIMES CONCERNED.
MICHAEL HIESE: Retail locations in general — and city centers in particular — thrive on diversity. A successful location depends on a broad mix of offerings, and everyone benefits from that. Our grocery-focused assortment overlaps very little with traditional inner-city specialty retailers. On the contrary, we see ourselves as an additional driver of foot traffic.
In Sofia, for example, we attracted a long-established bookstore to open a second location in the Central Market Hall without replacing its original store. In Split, we integrated a local fishmonger — a well-known, respected family business that continues to operate its original shop.
ACROSS: SO IT’S A WIN-WIN FOR BOTH SIDES?
MICHAEL HIESE: Exactly. It’s in everyone’s interest that smaller, local retailers continue to exist and that a model is created where all parties benefit from one another. These partnerships strengthen both the location and the local retail ecosystem. We benefit from the diversity of local retail just as much as local businesses benefit from us.
This isn’t about relocating traditional stores and leaving gaps elsewhere — it’s about creating additional destinations.
ACROSS: THE INTEGRATION OF LOCAL PLAYERS AND CUSTOMIZED CONCEPTS SEEMS MUCH MORE IMPORTANT IN URBAN SETTINGS THAN IN OUT-OF-TOWN FORMATS. IS THAT A KEY SUCCESS FACTOR?
MICHAEL HIESE: Absolutely. The key is combining the strength of a standardized concept like Kaufland with the specific needs of each location. Our modular systems allow us to respond to those requirements. That takes experience, flexibility, and a clear understanding of what’s economically and operationally necessary — and where regional character truly adds value.
We have a strong track record and know what works. Projects like Berlin Alexanderplatz or the Central Market Hall in Sofia show that this balance can be achieved. Urban retail isn’t a copy-and-paste model; it’s always tailored to the location. Ultimately, the goal is to create economically successful locations. And that requires careful decisions on how much localization is of value for each site.
ACROSS: DO YOU EXPECT THESE URBAN RETAIL FORMATS TO BECOME EVEN MORE IMPORTANT IN THE YEARS AHEAD?
MICHAEL HIESE: I do. We’re essentially seeing a renaissance. Retail is returning to the cities — where it originally began. Market conditions have changed, and so have consumer expectations. Mixed-use developments, shorter distances, and integrated neighborhoods create entirely new opportunities.
That said, success depends on collaboration. Cities play a critical role here. When economic viability, urban quality, and social considerations are aligned, sustainable urban retail locations can be created.
ACROSS: HOW DOES KAUFLAND PLAN TO APPROACH THE FURTHER DEVELOPMENT OF THESE LOCATIONS?
MICHAEL HIESE: Ultimately, it comes down to opportunity. Mixed-use developments like Projects in Byalistok or Sofia show that we have the experience and the right concepts. But these locations can’t be planned the same way as traditional expansion — they emerge when the opportunity arises.
You have to be prepared and have the right concepts in place to activate those sites. We do, and we have many years of experience developing and operating these projects. We want to continue pursuing this path and welcome any new location that fits our strategy.
ACROSS: ARE THERE ALREADY PROJECTS IN THE PIPELINE?
MICHAEL HIESE: Poland and Romania are particularly strong growth markets. There, we are already very well represented in mid-sized cities, but we continue to see opportunities in larger urban centers. Several projects are currently in the pipeline or at various stages of development.
For example, in Poznań we’re working on a project combined with a student housing concept. In December, we completed a mixed-use development within a residential high-rise in Sofia.
Looking ahead, I expect we’ll pursue more projects like these while continuing to expand our classic formats as well. If we’re convinced by a location, we always find a way to make it work
BEST PRACTICE — URBAN KAUFLAND LOCATIONS
Sofia, Central Market Hall Halite: Revitalization of an iconic, listed building
Berlin, Croatia: Integration of local retailers in a prime urban setting
Poland & Southeastern Europe: Mixed-use projects combining residential, student housing, and retail (Lidl & Kaufland)
KAUFLAND INTERNATIONAL
Part of the Schwarz Group
Active in eight countries (Germany, Czech Republic, Poland, Slovakia, Croatia, Romania, Moldova, Bulgaria)
Operates more than 1,600 stores
Around 157,000 employees internationally
2024 revenue: EUR 35.2 bn (+2.9%)
THE SCHWARZ GROUP – KEY FACTS
Total revenue FY 2024: EUR 175.4 bn (+4.9%)
Around 595.000 employees worldwide
Approximately 14,200 stores (Lidl & Kaufland)
