European Grocery Retailing - planetretail.net

1 1 European Grocery Retailing Change is the only constant May 2014 Kelly Tackett Research Director 2 Overview Retailers Trends Agenda 1. Market Overview 4 Economic recovery is not Serbia Russia Azerbaijan Armenia Georgia Ukraine Belarus Moldova Romania Hungary Poland Bulgaria Greece Cyprus Macedonia Albania Bosnia & Herzegovina Croatia Slovenia Italy Slovakia Czech Rep Germany Sweden Lithuania Latvia Estonia Finland Norway France Austria Switzerland Belgium Netherlands Spain Portugal United Kingdom Ireland Denmark + + + + + + + + + + + + + + Source: Planet Retail.

2 GDP Real Growth 2013 (%) + + + + + + + + + + + + + + 5 Spending power varies RepublicSpainEstoniaSlovakiaPortugalCroa tiaLithuaniaHungaryBulgariaMacedoniaGree ceRomaniaRussiaSerbiaBosnia and Grocery Spend per Capita 2013 ( 000) MGD Grocery Spend defined as sales of total Grocery products (edible Grocery , household & petcare, health & beauty and foodservice) from modern Grocery distribution retailers and wholesale enterprises (MGD) per capita. Source: Planet Retail 6 Consumers are very 15 Groups 67 Types 7 Grocery retail markets have different Positive retail sales do not necessarily reflect the full 0%10%20%30%40%50%60%70%80%90%100%FranceG ermany% of Grocery Sales Grocery Market.

3 Breakdown by Channel 2002 (%) Cash & Carries & WholesaleclubsConvenience & ForecourtstoresDiscount storesSupermarkets &Neighbourhood storesSuperstoresHypermarkets Other comprises Department & Variety Stores, Non-store Commerce, Other Grocery formats, Other Non-Food Formats, Catering and Source: Planet Retail. 8 But change is a common Busy lifestyles Increasing access to technology Changing Demographics Two working parents Hectic work/home schedules Smartphone/tablet penetration Home access to the internet Increasing single person households Commuting Ageing population Urban dwelling Tech-savvy generations becoming key consumers Shoppers becoming more informed 9 And Grocery channels are changing around Positive retail sales do not necessarily reflect the full 10 Growth by channel Western 050100150200250300350400450 Hypermarkets

4 &SuperstoresSupermarket &NeighbourhoodDiscountConvenience &ForecourtDrugstoresCash & CarriesSales (EUR bn) Western Europe: Total Banner Sales by Channel, 2008-2018f (EUR bn) 200820132018fNote: f forecast; Source: Planet Retail 11 Key Markets Germany Top 3 Grocery Players by Total Banner Sales (2013e) 02468 HypermarketsCash & CarriesConvenienceDiscount storesSupermarketsDrugstoresCAGR (%) Germany: CAGR Growth by Channel, 2013-2018f (%)** Note: f forecast Source: Planet Retail Top 3 Grocery Players by Food Retail Format Market Share (2013e) bn bn bn **Please note, hypermarkets includes superstores, convenience includes forecourts & supermarket includes neighbourhood stores.

5 GDP CAGR 2013-2018F Grocery banner retail sales CAGR 2013-2018F 12 Key Markets France Top 3 Grocery Players by Total Banner Sales (2013e) 0246 SupermarketsHypermarketsDiscount storesDrugstoresCash & CarriesConvenienceCAGR (%) France: CAGR Growth by Channel, 2013-2018f (%)** Note: f forecast Source: Planet Retail Top 3 Grocery Players by Food Retail Format Market Share (2013e) 45 bn 42 bn 31 bn **Please note, hypermarkets includes superstores, convenience includes forecourts & supermarket includes neighbourhood stores. GDP CAGR 2013-2018F Grocery banner retail sales CAGR 2013-2018F 13 Key Markets UK Top 3 Grocery Players by Total Banner Sales (2013e) 024681012 HypermarketsDrugstoresSupermarketCash & CarriesConvenienceDiscount storesCAGR (%) UK: CAGR Growth by Channel, 2013-2018f (%)** Note: f forecast Source: Planet Retail Top 3 Grocery Players by Food Retail Format Market Share (2013e) bn bn bn **Please note, hypermarkets includes superstores, convenience includes forecourts & supermarket includes neighbourhood stores.

6 GDP CAGR 2013-2018F Grocery banner retail sales CAGR 2013-2018F 14 Key Markets Italy Top 3 Grocery Players by Total Banner Sales (2013e) -1012345 Cash & CarriesConvenienceSupermarketsHypermarke tsDrugstoresDiscount storesCAGR (%) Italy: CAGR Growth by Channel, 2013-2018f (%)** Note: f forecast Source: Planet Retail Top 3 Grocery Players by Food Retail Format Market Share (2013e) 13 bn 10 bn 9 bn **Please note, hypermarkets includes superstores, convenience includes forecourts & supermarket includes neighbourhood stores. * Based on food retail format market share.

7 GDP CAGR 2013-2018F Grocery banner retail sales CAGR 2013-2018F 15 Key Markets Spain Top 3 Grocery Players by Total Banner Sales (2013e) 024681012 HypermarketsDiscount storesCash & CarriesSupermarketsConvenienceDrugstores CAGR (%) Spain: CAGR Growth by Channel, 2013-2018f (%)** Note: f forecast Source: Planet Retail Top 3 Grocery Players by Food Retail Format Market Share (2013e) 20 bn 16 bn 9 bn **Please note, hypermarkets includes superstores, convenience includes forecourts & supermarket includes neighbourhood stores. * Based on food retail format market share.

8 GDP CAGR 2013-2018F Grocery banner retail sales CAGR 2013-2018F 16 Key Markets Portugal Top 3 Grocery Players by Total Banner Sales (2013e) -20246810 ConvenienceCash & CarriesHypermarketsSupermarketsDiscount storesDrugstoresCAGR (%) Portugal: CAGR Growth by Channel, 2013-2018f (%)** Note: f forecast Source: Planet Retail Top 3 Grocery Players by Food Retail Format Market Share (2013e) 5 bn 5 bn 2 bn **Please note, hypermarkets includes superstores, convenience includes forecourts & supermarket includes neighbourhood stores. * Based on food retail format market share.

9 GDP CAGR 2013-2018F Grocery banner retail sales CAGR 2013-2018F 2. Leading Retailers 18 Competitive Environment 010203040506070 Retail Banner Sales (EUR bn) Western Europe: Top 10 Grocery Players by Total Banner Sales, 2013e (EUR bn) e estimate Source: Planet Retail. 19 Competitive Environment 0102030405060708090 Retail Banner Sales (EUR bn) Western Europe: Top 10 Grocery Players by Total Banner Sales, 2018f (EUR bn) Note: f forecast Source: Planet Retail 20 Key Players Carrefour Turn around ailing hypermarket format Improve its price image Expand smaller formats under the Carrefour Express, City and Contact banners Grow multi-channel via drive format Carrefour is focussing on revitalising operations in core markets with further disposals of peripheral operations a possibility.

10 #1 Carrefour Multi-channel is a key priority for Carrefour with the expansion of the Drive concept. Carrefour is expanding it s smaller format s such as Carrefour City above. 21 Key Players Schwarz Group Aims to become the largest food retailer in Europe Working to propel Lidl past Aldi as largest discounter in Europe Introducing minimum turnover per outlet requirements Investing heavily on the instore experience Schwarz Group is one of the most aggressively growing companies, with a presence in 25+ European markets. #2 Schwarz Group Lidl has been rolling out instore bakeries across W Europe as it looks to attract a broader spectrum of shoppers.