Saint-Petersburg food service overview

In the current year volume of local food service was low than year ago…

Saint-Petersburg is considering in a relatively low level of able to pay demand

Food service turnover, billion rubles

It can be explained as a no increase of customers income

Actual wages per capita, % to previous month

It is high level of social stratification by income…

Average wages per capita, rubles

In fact, most of the consumers have low income per capita

Source: PetrostatSource: Petrostat

Saint-Petersburg food service overview

It is complex situation with liquid premises in the center of Saint-Petersburg.

And rent rates are more competitive in shopping and business centers.

It is expected new openings of shopping malls in Saint-Petersburg in 2014.

Another problem aspect of food service market is high employee turnover and deficit of competent personal.

Considering these facts we can assume severalfactors that can help to choose appropriate companies on Saint-Petersburg food service market.

Actual state of business: Сonclusions:

• Developing through food courts, business centers and off-center formats

• Minimal requied personal per café. No waiters• Segments: Fast food, Fast casual• No waiters. Free flow service

• No liquid separate lease premises• Deficit of qualified staff• Low purchasing power• Time limitation of consumers

Average rental rate, rubles per sq.metre

Plan to open shopping mall in 2014

7

Methods of staff retention• Strong HR brand• Flexible working hours• Human development plan• Financial incentives

Trends in commercial real estate:• Increasing share of longterm rental contracts• Active housing supply turns food chains to off-center• Regional development

The most sustainable position in the near future will continue to hold democratic concepts - fast casual and fast food segments

Source: personal assessment, BNP Paribas Real Estate, gvasawyer.ruSource: personal assessment, BNP Paribas Real Estate, gvasawyer.ru

Teremok (Russian fast food)

The Russian fast food market shows permanent growth.

Saint-Petersburg is one of the top cities where demand is not satisfied.

Teremok is a leader by number of point of sales in Saint-Petersburg as a local player.

For the last year Teremokhas shown significant growth in sales to 2,3 billion of rubles( ~5% of market share).

Besides comparing with competitors Teremok has flexible business model which allow to work in different forms and open new segments.

Teremok has a strong stand on fast food market in Saint-Petersburg

Formats: Teremok Emelya Tea Spoon Kr. Kartoshka SushiWok SushiShop

Street Food 1 1 0 0 0 0

Food Court 1 1 1 1 0 0

Café 1 1 1 1 1 1Addition formats:

Coffee Shop 1 0 0 0 0 0

Banquet  0 1 0 0 0 0

Total number of fast food point of sales

Future key growth factors:• New shopping centers• Expansion in regions near SPb• New segments

Sales volume, bln rubNumber of point of sales in Saint-Petersburg, 2014

Source: personal assessment, rbc research, VedomostiSource: personal assessment, rbc research, Vedomosti

Marketplace (fast casual, free flow)

Marketplace has some advantages in comparing with fast food companies.

It provides comfort self-service with wide assortment of food for the democratic prices.

There are no many competitors in that niche in Saint-Petersburg, but it has a lot of analogues in other cities.

Marketplace business model requires permanent flow of consumers.

We can divide Marketplace locations on two main groups: tourist center and business centers.

The company already has 3 cafes in business centers and it can expand successfully in this field.

Marketplace has a good opportunity to build business in Saint-Petersburg

Specifications of format: Fast Food

Using your own blanks

Fast service

Reasonable price meals, special offers

Democratic atmosphere

The assortment of dishes and regular

updating of positions

Returnable dishes

Interior

Healthy food

Average bill (rubles) 300-400 * 250

Year of foundation 2012

Number of cafes 7

LocationMostly in center area near

business and tourists places

Competitors in format Obed Bufet ( Ginza Project)

Analogues in other

cities:

Company Overview:

Location

Tourist Area Business Area

• 3 cafes in center• 1 café in south area

• Good opportunities to grow through business centers…

New business-centers

Source: site of the company, * - personal assessment, bsn.ru, rbc research