development in regions - hotnews.romedia.hotnews.ro/media_server1/document-2008-05-8...2008/05/08...

Development in regionsPrepared by Miloš Ryba, Retail Analyst

Planet Retail Ltd | April 2008

www.planetretail.netpart of emap communications

www.planetretail.netDevelopment in regions© Planet Retail Ltd 2008

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4


Agenda

Overview of the CE Market

5

Overview of the Romanian retail scene

Three examples of a successful regional expansion

Conclusions


8,243

10,147

7,397

5,828

5,088

2,726

3,095

2,459

2,579

4,007

20,780

17,537

13,513

13,146

11,817

5,630

5,582

5,460

5,189

4,997

0 5,000 10,000 15,000 20,000 25,000

Schwarz Group

Metro Group

Tesco

Carrefour

Rewe Group

Mercator

Ahold

Maxima

CBA

Retail Banner Sales (EUR mn)e

2007 2013

Central Europe (CE) - TOP10 Retailers

6


Central and Eastern Europe - Market concentration of TOP5 retailers in 2007

• Markets dominated by Western European retailers

Germany

UK

France

ItalySpain

Netherlands

Switzerland

Belgium

Sweden

Austria

Norway

Poland

Denmark

Greece

Finland

Ireland

Portugal

Czech Republic

Hungary

Romania

Slovakia

Croatia

Slovenia

Luxembourg

Bulgaria

Serbia

Lithuania

Cyprus

Latvia

Iceland

Bosnia Herzegovina

AlbaniaMacedonia

Malta

Turkey

Russia

Montenegro

Ukraine

Moldova

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Market share up to 30%

Market share 30% - 60%

Market share over 60%

• The level of market consolidation in CE is considerably lower than in WE


Title

8

285

415

524

985

1,954

2,294

2,611

3,633

3,874

4,713

2013 Banner Sales (EUR mn)e

56

223

96

196

58

435

430

1,112

606

1,520

2007Banner Food

Sales (EUR mn)e

0.42000.380ITM10.

0.63111.1297CBA9.

1.04720.5107Delhaize Group8.

1.78371.0231Tengelmann7.

2.41,1730.397Auchan6.

3.61,7212.1580Schwarz Group5.

3.41,6412.1676Louise Delhaize4.

6.43,0975.51,327Rewe Group3.

5.92,8483.0866Carrefour2.

7.03,3817.52,148Metro Group1.

2013Market Share (%)

2013Banner

Food Sales (EUR mn)e

2007Market

share (%)

2007 Banner Sales

(EUR mn)eCompanyRank

Romania - TOP10 market leaders 2007 and 2013


2,148

866

1,327

676

580

97

231

107

297

80

4,713

3,874

3,633

2,611

2,294

1,954

985

524

415

285

Metro Group

Carrefour

Rewe Group

Louis Delhaize

Schwarz Group

Auchan

Tengelmann

Delhaize Group

CBA

ITM

Retail Banner Sales (EUR mn)e

2007 2013

Romania - TOP10 market leaders 2007 and 2013

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Traditional channels

72%

Cash & Carry10.9%

Forecourt and Convenience

Stores0.5%

Hyperm arke ts and

Supers tores10.3%

Superm arkets and

Ne ighbourhood Stores

3.3%

Discount Stores

2.5%

20132007

Retail market structure in Romania, 2007 - 2013

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Traditional Channels

59%

Discount Stores4.7%

Forecourt and Convenience

Stores0.3%

Cash & Carry8.6%

Supermarkets and

Neighbourhood Stores5.2%

Hypermarkets and

Superstores21.5%


Regional development strategies - practical examples

Schwarz Group in the Czech Republic

11

Tesco in Hungary

COOP EURO in Slovakia



TOP3 retailer in Europe after Carrefour and Tesco

12

Market leader in CE and the Czech Republic

Multi-format strategy

Expansion through opening own stores

Price oriented formats

86 Kaufland stores and over 180 Lidl stores in 2007



Expansion into new markets, where competition was low (absence of Aldi)

13

Schwarz Group’s unified store concepts vs lack of local products

Opening Kaufland hypermarkets (1997) followed by Lidl discount stores (2003)

Store opening in the Western regions first. Later move towards East

Targeted regional cities and their surroundings in the first stage. Later moved into cities with 20,000 and less inhabitants

Construction of distribution centres

Both formats have universal concepts


Tesco in Hungary

TOP2 retailer in Europe after Carrefour

14

Price oriented multi-format strategy (hypermarkets, supermarkets, convenience stores)

Over 70% of sales generated in its home UK market

In Central Europe presented only in CZ, SK, PL and Hungary. However, leading retailer in all these markets

TOP1 retailer in Hungary

The clear hypermarket operator in the country with around 75 hypermarkets in 2007

Expansion through organic growth but also M&A


Tesco in Hungary

Early mover – expansion in Eastern Europe in 90’s

15

Took advantage “of being local”

Focus on the expansion of the most profitable format - hypermarkets

Introduction of a smaller format in 2004

Very efficient logistics



COOP EURO is an association of local retailers and independent stores

16

Market leader with more than 2,300 stores, however losing its market shares

Stores located in cities, towns and countryside in particular

COOP EURO only coordinates some buying and marketing activities in the three countries

Key store format neighbourhood stores and supermarkets



Joint buying and marketing strategy

17

New dynamic logo

Development of private label products

Strong logistics base thanks to its wholesale warehouses

Launch of a superstore format in big cities

Store rebranding


Potential for regional development

Conclusions

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• Regional cities and its surroundings

• Cities and town with high buying power

• Densely populated regions

• Regions with good infrastructure

• Industrial regions

Why expand into regions

• Strong competition in cities

• Saturation in cities

• The first movers’ advantage

• Manufactures and outsourcing

• Legislation restrains (Antitrust Office, measures to protect local retailers)


Conclusion

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Successful expansion underlined by

• Price oriented formats

• Strong logistics base

• Multi-formats

• Store efficiency (location, size)

• Contact with local population


Contact details

Miloš RybaRetail Analyst

Planet Retail LtdT: +44 (0)207 728 4962F: +44 (0)207 728 [email protected]

United Kingdom:

Greater London House, Hampstead Road,London NW1 7EJ, United KingdomT: +44 (0)207 728 5000F: +44 (0)207 728 4999

Germany:

Dreieichstrasse 59, D-60594 Frankfurt am Main, GermanyT: +49 (0) 69 96 21 75-0F: +49 (0) 69 96 21 75-40

Japan:

Minami-Magome 5-42-3-508, Ohta-ku, Tokyo 143-0025, JapanT: +81 (0) 3 3775 4158F: +81 (0) 3 3775 4162

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development in regions - hotnews.romedia.hotnews.ro/media_server1/document-2008-05-8...2008/05/08...

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