Retail Trends in CEE Countries, der Lebensmittelhandel im Wandel der Zeit

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Retail Trends in CEE Countries, der
Lebensmittelhandel im Wandel der Zeit

• MARKTPLATZ ÖSTERREICH Lebensmittel aus
  Österreich für Mittel-, Ost- und Südosteuropa
• Wien, März 2006

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Agenda

• About ACNielsen
• Global Scene
• Europe development of Retail Trade
• Discounters
• Retail Trade trends in CEE Countries
• Modern Trade evolution
• Where are / will be Consumer shopping?

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About ACNielsen
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About ACNielsen / VNU
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VNU function areas
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VNU / ACNielsen main info

• VNU
• Wide range data supplier
• Over 100 countries
• 38 000 employees
• ...out of which
• Marketing info supplier
• Over 100 countries
• 21 000 employees

more info on www.ACNielsen.com
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Retail Trade information core
CASH CARRY WHOLESALERS
OPEN MARKETS
MANUFACTURERS
MAGAZINES
RETAIL TRADE
NOT COVERED CHANNELS - HORECA - SEASONAL SALES
POINTS - INSTITUTIONAL SALES (hospital, army)
CONSUMERS
Info for Russia cover urban area (cities with
population gt10k inhab.)
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Retail Trade information source
Data Analysis( recommendations)
Data Processing(using computer systems)
Data Collecting(auditors or pure scan data)
Constructions of Panel of Stores(stores
micro-representativeness)
Defining Stores Population(number of stores of
particular type, turover generated)
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Retail Trade information source
Data Analysis( recommendations)
Data Processing(using computer systems)
Data Collecting(auditors or pure scan data)
Constructions of Panel of Stores(stores
micro-representativeness)
Defining Stores Population(number of stores of
particular type, turover generated)
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Global Scene
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Top 20 retailers globallyranked on Net Sales in
USD mln 2004
12
Trade concentrationminimum 50 of sales for the
Top 3 Retailers is now the norm!
13
Opening new stores examples

• WalMart
• Domestic super centers 441 in 1998 to 1258 in
  2004
• International from 600 to 1288
• Carrefour
• from 350 gt more than 850
• Ahold
• Road to recovery program
• Opened/acquired 1524 units since 2000
• Closed/disposed -1282 units since 2000
• Tesco
• 2300 stores in 12 countries
• Intl. is 20 of sales but 49 of selling surface
• etc. etc. etc.

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Number of stores gt 400m2 in Europestores gt 400m2
Modern / Organized Trade
66.600

• Number of Modern Trade stores doubled

Location, Location, Location
30.000
15
Stores format evolution in Europe (by
value)Hypermarkets and LargeSM gaining
importance at the cost of traditional stores
16
However Europe remains a mosaic... ...and so are
the CEE countries as well
of sales
17
Number of stores in Europeamong Modern Trade -
Discount stores have now largest number of
outlets
15.600
5.600
33.000
2.000
5.100
NA
2004
1984
1984
2004
2004
1984
Hypermarkets
Large Supermarket
Discount stores
115.000
515.200
26.200
73.500
12.500
220.000
2004
1984
2004
1984
2004
1984
Small Supermarket
Traditional stores
Superettes
18
Discount Retailers development in Europe
Growth driven by Hard Discounters
HD 52
Germany 50 of HD
SD 48
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Hard discounters record consequent growthwhile
soft discounters stabilized
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European Discount Banners
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Typical differences Hard vs. Soft discount
Soft Discounters
Hard Discounters (Pioneered by Aldi)
1.500 3.000 SKUs (sometimes normal supermarket
assortment)
500 1.500 SKUs
Assortment size
Based on Branded products. Private label became
more and more important in the last years.
Based on Private labels. Manufacturer products
are used for completing special categories only.
Assortment Strategy / Branded Products
Low
Extremely low
Price level

• Everywhere
• Small 300-500 m²
• Medium 500-1500m²
• Large 1500-3000m²

• In town Centers
• 300 400 m²
• Outside suburbs
• 600 1000 m²

Location / Size of stores
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Hard Soft discounters importance

• Discounters shares vary from country to country
• shares differ from 4 in Ireland up to 53 in
  Norway
• Germany leading in Hard Discounts importance

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Discounters density in Europe
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Discounters density in Europe

• CEE countries
• Romania 320 000
• Russia 95 000
• Slovakia 95 000
• Poland 27 000
• Czech Rep. 25 000
• Hungary 24 000
• Slovenia 18 000

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Discount Retailers TurnoverTotal Europe in
Billion
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Phenomenon of Discount successschizophrenic
shopper

• Location
• Convenient to get to
• Close to home
• Immediate shopping

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Phenomenon of Discount successschizophrenic
shopper

• Location
• Convenient to get to
• Close to home
• Immediate shopping

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Phenomenon of Discount successschizophrenic
shopper

• Location
• Convenient to get to
• Close to home
• Immediate shopping

• Price
• Cheapest attractive promotion
• For good-quality

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Discount Retailers prices
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Retail Trade Structure in CEE Countries
31
CEE countries

• 10 Countries
• (Poland, Czech Republic, Slovak Republic,
  Hungary, Slovenia, Croatia, SerbiaMontenegro,
  Romania, Bulgaria, Russia)
• - 5 EU members
• (Candidates Romania, Bulgaria, Croatia)
• Total population 252 mio
• No of households 91 mio

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Key economic indicator for CEE(number of
households)
Number of households in mln
Bulgaria
2.9
2001/2
Croatia
1.5
2001/2
Czech Republic
4.4
2004
Hungary
3.8
2004
Poland
13.7
2004
Romania
7.3
2004
Russia
52.7
2003
Serbia
2.5
2004
Slovak Republic
1.9
2004
Slovenia
0.7
2001/2
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Key economic indicator for CEE(GDP per capita)
GDP per capita in USD
2004
Bulgaria
8.200
Croatia
11.200
Czech Republic
16.800
Hungary
14.900
Poland
12.000
Romania
7.700
Russia
9.800
Serbia Montenegro
2.400
Slovak Republic
14.500
Slovenia
19.600
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Key economic indicator for CEE(real GDP growth )
Real GDP growth ()
2003
2004
Bulgaria
4.3
4.8
Croatia
4.3
3.7
Czech Republic
2.9
3.9
Hungary
2.9
3.9
Poland
3.7
5.5
Romania
4.9
7.5
Russia
7.3
7.2
Serbia Montenegro
2.2
6.0
Slovak Republic
4.2
5.2
Slovenia
2.5
3.9
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Key economic indicator for CEE(inflation rate)
Annual average inflation rate ()
2003
2004
Bulgaria
2.3
6.3
Croatia
1.8
2.0
Czech Republic
0.1
2.8
Hungary
4.7
6.9
Poland
0.7
3.5
Romania
15.3
11.9
Russia
12.0
11.7
Serbia Montenegro
11.2
9.4
Slovak Republic
8.6
7.7
Slovenia
5.6
3.5
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Key economic indicator for CEE(number of
inhabitants)
Number of inhabitants in mln
Bulgaria
7.8
2004
Croatia
4.4
2003e
Czech Republic
10.2
2004
Hungary
10.1
2004
Poland
38.2
2004
Romania
21.7
2004
Russia
144.2
2003
Serbia
7.5
2003/4
Slovak Republic
5.4
2004
Slovenia
2.0
2001/2
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Key economic indicator for CEE(number of
inhabitants / number of Modern Trade stores per
capita)
Number of inhabitants vs. Modern Trade density
OF INHABITANTS IN MLN
Russia
144.2
2003
Poland
38.2
2004
Romania
21.7
2004
Czech Republic
10.2
2004
Hungary
10.1
2004
Bulgaria
7.8
2004
Serbia
7.5
2003/4
Slovak Republic
5.4
2004
Croatia
4.4
2003e
Slovenia
2.0
2001/2
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Key economic indicator for CEE(number of
inhabitants / number of Modern Trade stores per
capita)
Number of inhabitants vs. Modern Trade density
OF INHABITANTS IN MLN
Russia
144.2
2003
Poland
38.2
2004
Romania
21.7
2004
Czech Republic
10.2
2004
Hungary
10.1
2004
Bulgaria
7.8
2004
Serbia
7.5
2003/4
Slovak Republic
5.4
2004
Croatia
4.4
2003e
Slovenia
2.0
2001/2
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Number of Discount stores in CEEthere are still
countries with no discout stores
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Number of total Modern Trade outlets in CEE(MT
definitions vary slightly among countries gt300 /
gt400sq.m)
CEE 23
CEE 12
Excl. Serbia
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Increasing Modern Trade outlets in CEE despite
of overwhelming numeric importance of traditional
trade
Incl. MiniSM 7Open-markets 34
42
Increasing Modern Trade outlets in CEE despite
of overwhelming numeric importance of traditional
trade
MiniSM
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HYPER-markets development in CEE
207
164
92
31
28
77
7
6
2005
2004
2004
2005
2005
2005
2004
2004
BG
CRO
CR
HU
204
94
182
78
15
15
6
4
2005
2004
2005
2005
2004
2005
2004
2004
SLO
PL
SR
RO
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Largest number of new Hypers openings
SLO
SR
PL
RO
RU
BG
CRO
CR
HU
Evropa
Viktoria
7th continent
45
SUPER-markets development in CEE (also incl.
Discounters)
2743
1125
2444
962
814
753
346
310
117
84
2005
2005
2005
2005
2005
2004
2004
2004
2004
2004
BG
CRO
CR
HU
PL
2177
365
1413
339
290
294
338
240
233
194
2005
2005
2005
2005
2005
2004
2004
2004
2004
2004
RO
RU MT total
SER MT total
SR
SLO
46
Largest number of new Supers/Discounts openings
SLO
SR
PL
RO
RU
SER
BG
CRO
CR
HU
7th continent
Evropa
Lilly
Idea
CBA
Maxi
Tander-Magnit
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Intl. brands or Intl. companies owned local
brands are growing on expence of local brands

• Local brands benefit from strong brand equity in
  the CEE markets
• High consumer awareness
• Strong image
• Better value for money (perception)
• Unique relationship to consumer
• Lower investment
• HOWEVER
• International brands or International companies
  owned local brands are gaining on importance
• Due to expansion of international retailers

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Retail Trade development stages(retail
environment evolution in post-communistic
countries)
49
Modern Intl. Trade development stages(approx.
timings of Modern Retailers entrance and
strongest development)
1995
2000
2005
1990
PL
SLO
BG
Tus Spar
Metro Rewe Billa Ramstore CBA
Tangelmann Jeronimo Martins Ahold Auchan Carrefour
Casino Netto Metro Globi Intermarche ELeclerc Te
sco / Hit
SR
Tesco Kaufland Ahold Carrefour
HU
SER
Metro Tesco Rewe Auchan Provera Interspar Tangelma
nn
Merkator Interex Metro
RU
Ramstore Metro Auchan
RO
Carrefour Rewe Profi Intermarche Tangelmann Kaufla
nd VPMarket
CR
CRO
na
Makro Schwarz Tesco Carrefour
50
Stores format evolution in CEE
of value sales
CEE 4p
CEE 2p
51
However CEE countries remain a mosaic too...
INCL. OPEN- MARKETS
of sales
52
What to expect in future?

• The big continue to get bigger
• Markets are becoming increasingly consolidated
• Further development of differing formats
• Hyper-, Supermarkets, Discounts
• Discount phenomenon likely to develop
  dynamically in CEE
• Increased shopper sophistication / expectations
• Convenience, one stop shopping, location, good
  price