Radoslav Škapa

Retail in Czech Republic(overview)

Retail market of consumer goods

Dynamical development in the past 10 yearsSupplier’s dominance transformed into customer’s dominanceMultinational supply companies established new, more

efficient and modern distribution channels The market proportion of hypermarkets, supermarkets and

discount stores is fully comparable to the Western

European countries, following actual tendencies

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%19

93

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

družstva

státní

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Sh

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StateLocalInternatioal

Pramen: INCOMA Research

The share of turnover per proprietor type

THE MAIN SHOPPING PLACE FOR FOOD (development 1997-2007)

0

10

20

30

40

50

60

70

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

% č

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akupující

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supermarket

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Small shops

THE MAIN SHOPPING PLACE FOR FOOD (development 1997-2007)

Cumulative number of hypermarkets

Tendencies in Czech retail 2008

• Large-area shops (hypermarkets, discounts and supermarkets) as a whole have been permanently strengthening their market share but have been losing customers in sensitive goods categories.

• Remain the main point for shopping of durable food products as packed food products, beverages (Consumers preferences are usually from 75% to 83%

• Loosing in fresh food products (bread, pastry etc.) or specialized assortment of drugstore and cosmetics products (which are interesting from point of view of the margin!!!)

0

20

40

60

80

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do 999 obyvatel 1000-4999obyv.

5000-19999obyv.

20000-99999obyv.

od 100000obyv.

velikost obce

% n

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Market share and the size of municipality

Floor space of hypermarkets in squere meters per 1000 inhabitants

The differences in per capita purchasing power

in the Czech regions

Source: Purchasing power in the Czech districts and municipalities 2005 (GfK + INCOMA)

Cities with the highest shopping center space per 1,000 inhabitants

Western Europe * Eastern Europe

Leonding (Austria)1,558 m2

Ljubljana (Slovenia) 1,667 m2

Sankt Pölten (Austria)1,444 m2

Karlovy Vary (Czech Republic ) 1,343 m2

Wiener Neustadt (Austria)1,406 m2

Hradec Kralove (Czech Republic) 1,040 m2

Stockholm (Sweden)1,165 m2

Plzen (Czech Republic)   922 m2

Geneva (Switzerland)  891 m2

Olomouc (Czech Republic)   899 m2

 * (Germany and France are not included in the statistics. Germany is available separately as “GfK GeoMarketing Retail Location Guide Germany“. The guide for France is currently under way. All retail location studies are updated annually.)

Czech Rep. Germany

Purchasing parity level

66% 100%

Floor space in square meters per inhabitnat

75% 100%

7 812

1518

24

34

4144

4750 52 53

63

0

10

20

30

40

50

60

7019

93

1994

1995

1996

1997

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2006

rok

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[%

]Retail TOP10: process of concentration

Pramen: INCOMA Research

205

14

311

127

345

216

378

261

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1993 2000 2006 2010rok

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TOP10

Retail TOP10: process of concentration (turnover on Czech market)

7%

70%

Pramen: INCOMA Research

TOP10 SKUPIN PODLE MALOOBCHODNÍCH TRŽEB(na základě předběžných výsledků r.2006)

Skupina Schwarz se stala největším českým maloobchodníkem

Celkové tržby TOP10 přesáhly 250 mld. Kč

Meziroční nárůst tržeb činí přes 30 mld. Kč

Tržby jsou uvedeny včetně DPH* = odhad INCOMA ResearchPramen: INCOMA Research + Moderní obchod

Pořadí Skupina / Firma2005 2006 změna

1. Schwarz ČR 38,0 * 43,5 * 5,5KauflandLidl ČR

2. - 3. Ahold Czech Republic 36,5 * 38,5 * 2,0HypernovaAlbert

2. - 3. Tesco Stores ČR 22,5 * 38,5 * 16,0Tesco hypermarket (vč. ex-Carrefour)Tesco obchodní důmTesco supermarket (vč. ex-Edeka)

4. Makro Cash&Carry ČR 37,5 38,3 0,85. REWE ČR 23,2 * 25,8 * 2,6

BillaPenny Market

6. Globus ČR 19,0 20,5 1,57. Tengelmann ČR 19,2 * 19,5 * 0,3

Plus - DiscountOBI - systémová centrála

8. GECO TABAK 12,5 14,9 2,49. SPAR ČR 11,0 * 12,0 * 1,0

Spar Česká obchodní společnost

Spar Šumava

10. Delvita 9,0 * 8,8 * -0,21.-10. TOTAL 228,4 * 261,3 * 32,9

tržby (mld. Kč)

The main shopping place for food- 2006

nejpreferovanější řetězec (hlavní nákupní místo) Kaufland

nejznámější řetězec bez nápovědy Tesco

nejznámější řetězec s nápovědou Lidl

Nejnavštěvovanější řetězec Kaufland

Nejvyšší znalost letáků Tesco

nejlépe hodnocené ceny Kaufland

nejlépe hodnocená šíře sortimentu Globus

nejlépe hodnocené prostředí a atmosféra prodejny Globus

nejlépe hodnocená čerstvost a kvalita zboží Globus

nejlépe hodnocená dostupnost a kvalita personálu Tip, Konzum

CELKOVĚ NEJLÉPE HODNOCENÝ ŘETĚZEC Globus

HODNOCENÍ OBCHODNÍCH ŘETĚZCŮ ZÁKAZNÍKY

Pramen: Shopping Monitor 2006 (INCOMA Research + GfK Praha)

SHOPPING AS A WAY OF SPENDING TIME

Source: SHOPPING MALL 2004 (INCOMA + GfK)

HOW MUCH TIME DO YOU USUALLY SPEND WHEN YOU LAST IN YOUR SHOPPING CENTER?

2% 5% 19%

52%

22%

5 hours and more

3-4 hours

2-3 hours

1-2 hours

less than one hour

man woman man woman

Selling time restriction

Shops open during red-letter day?

Non-stop Open untill 22:00?

GfK Praha, 2004

85 8066 61 63 69

60 57 49 53 5739 40 37 32 24 22 29

17

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29 3036 32 24

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in %

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very important

1,191,27 1,44 1,50 1,48

1,681,59 1,691,71

2,542,10 2,16

2,712,652,77

3,232,99

1,42 1,54

WHAT IS IMPORTANT FOR YOU WHEN BUYING FOOD?

A new contradictious tendency?

Alternative trade channels • In accordance with PriceWaterhouse

Coopers, more than 50% of food will be traded outside classical retail. (That is, in independent convenience stores, stalls, in marketplace or multiplex.)

• Time-saving

• People-centered not technology-centered

Two-way shopping

Why ATC?

• Aging population

• Single parent families, singles, one child f.

• No time for shopping

ATC in Czech rep.

• Turnover 5-10 mdl. CZK per year

• Rate of grow: 10 – 20%

A new contradictious tendency?

THE PER CAPITA PURCHASING PARITY LEVEL

IN CENTRAL EUROPE RELATED TO EU 15

Shoppers typology

Unpretentious stoic

14%

Saver17% Influenceable

14%

Ambitious19%

Mobile pragmatic

14%

Loyal housewife

11%

Cautious conservatie

11%

Unpretentious stoic

Loyal housewife

Mobile pragmatic

Cautious Conservatie

Saver

Ambitious Influenceable

60

80

100

120

140

50 60 70 80 90 100 110 120 130

Prefer smaller stores

Prefer hypermarkets

Buy necessary thing only

Buy avoidable things as well

Shopping behaviour

Trademarks of retail chainseconomical (best price)

Clever (Billa)Euro Shopper (Albert, Hypernova)

Mince (J. Meinl)Tesco výhodný nákup (Tesco)

1 (Carrefour)365 (Delvita)

standard quality for better priceAlbert (Albert)

Carrefour (Carrefour)Delvita (Delvita)

Hypernova (Hypernova)Spar (Interspar)Tesco (Tesco)

special (selected range of products)Best farm (Kaufland)

Selský dvůr (Hypernova)Chef Menü (Billa)

Extra kvalita (Delvita)Quality first (Billa)

Julius Meinl (J. Meinl)