the winning formats in europe
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The winning formats in Europe. Planet Retail Ltd | September 2010. About Planet Retail. We are: The leading Global Retail Analyst firm since 1995. We analyse: 7,000 retail operations across 211 retail markets. We serve: 14 of Top 20 Consumer Goods companies 15 of Top 20 Retailers - PowerPoint PPT PresentationTRANSCRIPT
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The winning formats in Europe
Planet Retail Ltd | September 2010
www.planetretail.netThe winning formats in Europe2 of 21
We are: The leading Global Retail Analyst firm since 1995.
We analyse: 7,000 retail operations across 211 retail markets.
We serve:
14 of Top 20 Consumer Goods companies
15 of Top 20 Retailers
9 of Top 20 Retail Technology Vendors
We deliver: Critical insights that create competitive advantage.
About Planet Retail
www.planetretail.netThe winning formats in Europe3 of 21
1. Consolidation in the European retail scene
2. Channel development in Europe
3. The most successful retailers and formats
4. The battle of domestic players with foreign retailers
5. Attractiveness of CEE
6. Conclusions
Agenda
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Market consolidation in Europe
Russia
Azerbaijan
Armenia
Georgia
Ukraine
Belarus
Moldova
Romania
Hungary
Poland
Bulgaria
Greece
Cyprus
FYROMacedoniaAlbania
Serbia
Bosnia & Herzegovina
CroatiaSlovenia
Italy
SlovakiaCzech Rep
Germany
Sweden
Lithuania
Latvia
Estonia
FinlandNorway
France
AustriaSwitzerland
Luxembourg
Belgium
Netherlands
SpainPortugal
UnitedKingdom
Ireland
Iceland
Denmark
Europe
Western Europe is a homogenous market
Central and Eastern Europe is diverse
Market share of TOP 5 grocery retailers up to 30%
Market share of TOP 5 grocery retailers 30% - 60%
Market share of TOP 5 grocery retailers over 60%
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Channel CAGR Growth
Western Europe Central Europe Eastern Europe0
2
4
6
8
10
12
14
16
18
4.09
8.02
15.63
3.94
5.54
13.34
5.82
14.34
0
5.32
7.96 7.82
2.33
6.4
10.3
4.17
7.85
3.93
Chart: Europe, Channel CAGR Growth, 2009e – 2014f
Hypermarkets & Superstores Supermarkets & Neighbourhood storesDiscount stores Convenience storesCash&Carry Drugstores
% G
row
th
Source: Planet Retail Ltd – www.planetretail.nete = estimatedf = forecast
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Western Europe – TOP leading retailers
Carrefour losing its share, while Tesco and Schwarz Group set to grow fast
Metro Group
Sainsbury's
Leclerc
Edeka
Auchan
Rewe Group
Aldi
Schwarz Group
Tesco
Carrefour
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000
33,465
33,652
39,378
46,607
47,729
48,666
52,013
66,602
72,536
81,921
32,575
23,621
34,100
42,499
38,893
40,772
41,032
49,169
49,502
74,693
Western Europe: Retail Banner Sales, 2009e – 2014f (EUR mn)
2009
2014
Source: Planet Retail Ltd – www.planetretail.nete = estimatedf = forecast
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Central Europe – TOP leading retailers
Schwarz Group will become the clear leader in Central Europe by 2014.
Auchan
Ahold
Agrokor
CBA
Jerónimo Martins
Rewe Group
Carrefour
Tesco
Metro Group
Schwarz Group
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000
4,052
4,071
4,074
4,209
7,909
9,226
10,543
11,726
13,464
18,275
2,828
3,324
2,631
3,318
3,989
5,652
6,521
7,301
10,056
9,851
Central Europe: Retail Banner Sales, 2009e – 2014f (EUR mn)
2009
2014
Source: Planet Retail Ltd – www.planetretail.nete = estimatedf = forecast
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Eastern Europe – TOP leading retailers
Foreign retailers in EE in the shadow of domestic players
Sedmoi Kontinent
Kopeika
Rewe Group
Lenta
Dixy Group
O'Key
Auchan
Metro Group
Magnit
X5 Retail Group
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000
2,488
2,816
2,821
3,267
4,211
5,804
6,914
8,090
10,327
18,351
1,109
1,431
599
1,454
1,409
1,752
4,129
4,529
4,409
7,134
Eastern Europe: Retail Banner Sales, 2009e – 2014f (EUR mn)
2009
2014
Source: Planet Retail Ltd – www.planetretail.nete = estimatedf = forecast
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Schwarz Group Present in 26 European countries
with sales of EUR59 billion (USD82 billion) in 2009.
72% of revenue - Lidl discount stores
28% of revenue - Kaufland price orientated compact hypermarkets
Around 18% of Schwarz Group’s total revenue generated in CE
Leading discounter and second largest hypermarket operator in CE
Aggressive expansion in almost all Central European countries
Potential new markets: Romania, Bulgaria
Lidl needs several years to break even in some markets
The most successful formats and retailers
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The most successful formats and retailers
Schwarz Group’s Lidl - the most successful discount format in Europe
Soft discount concept with around 2,000 items on offer
Sales area 700 – 1,000 square metres
PL account for around 70% of Lidl’s turnover
Move into convenience locations in city centres
fresh bakery, instore oven
Butcher’s counter
Expansion of F&V
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The most successful formats and retailers
Jeronimo Martin’s Biedronka is an impressive phenomena in the Polish discount scene
1,500 Biedronka stores across Poland
Stores located in residential areas and city neighbourhoods
Sales area of around 550 square metres
Soft discount concept with up to 1,000 items on offer
PL account for around 60% of Biedronka’s turnover
Focus on private label products sourced from local manufacturers
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The most successful formats and retailers
Tesco has introduced a convenience store format Tesco Express into Central Europe
Tesco operates over 1,000 Tesco Express stores in the UK
Product range up to 3,000 items
Sales area - 300 square metres
Strong focus on lunch time snacks, ready meals and F&V
Expansion of the concept in the CEE
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The most successful formats and retailers
Carrefour has introduced its new hypermarket format Carrefour Planet
Sales area around 14,000 sq m
Each hypermarket focuses on 9 key areas which include a market zone, organics, frozen foods, beauty, fashion, baby care, home and multimedia
The share of Carrefour-branded products within the concept has been increased
Estimated renovation cost at EUR20 million (USD24.4 million) per store
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Stiff competition in the Czech Republic
Domestic players fighting with foreign retailers
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CBA Hungary successfully competes with Tesco
CBA operates around 3,300 supermarkets and neighbourhood stores across Hungary
Its revenues grew by 0.5% to HUF548 billion in 2009, whereas Tesco saw decline by -3.6% to HUF634 billion
CBA has introduced a limeted range of private label products (only 500 SKUs in 2010)
Business consolidation - around 250 unprofitable stores closed in 2009
Domestic players fighting with foreign retailers
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Walmart interested only in large markets in CEE
Walmart
Walmart can use its cash-rich US operations to bank-roll international development
Has bitter experience from market entry into Germany. Apart from the UK, no experience of European retailing
Focus on expansion in Mexico, India and China
Walmart has been eyeing Russia and Turkey Source: Planet Retail Ltd – www.planetretail.net
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Carrefour will not become a leader in CEE
Carrefour
Leading position in Western Europe
However, a marginal position in many countries, without any obvious opportunity to achieve a TOP 3 position
Operations in Latin America and China have high growth rates
Exited the Czech Republic and Slovakia (2005) and Russia (2009)
Allocated funds for expansion in the Balkans
Carrefour’s expansion will depend on its recovery in France
Source: Planet Retail Ltd – www.planetretail.net
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Tesco likely to continue in its CEE success story at a smaller scale
Tesco
Tesco focus on expansion in Turkey and Asia GBP500 million investment in
China in 2010
Market entry into India in 2010
Investment into the struggling US operations
New market entry in CEE likely through M&A of a strong local player
Tesco is likely to expand into a smaller country in CEE as a part of its regional expansion
Source: Planet Retail Ltd – www.planetretail.net
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Metro Group to consolidate its position in CEE
Metro Group
Metro Group is a pan-European retailer
Early mover advantage in most of the countries
Expansion areas for the long-term will be China, CEE with focus on Russia and Ukraine
A smaller cash & carry concept to be tested in many CEE countries (Russia 2011) may be rolled out across Europe
Source: Planet Retail Ltd – www.planetretail.net
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Discount stores in WE and CE together with hypermarkets and price orientated supermarkets in EE will be the fastest growing channel
Schwarz Group will be the fastest growing retailer in CE soon with good prospects for success in the whole CEE region
Tesco - the pioneer of the convenience store concept in CE. Large potential for the concept in the long-term across CEE
Soft discount format like Lidl and Biedronka are the most successful
Domestic players losing their battles in many CE countries
Global market players focus on Asia. Russia and Balkans seem to be the only regions they are interested in in CEE
Retailing in CEE to be driven by the European retailers like Schwarz Group and Metro Group in the next few years
Conclusions
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Miloš RybaSenior Retail Analyst
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