Retailing InRUSSIA

Presented By :Nana AmakoHatice GürkaşBerivan Altındağ

An Overview OF The Russian Economy

2009 2010 2011 2012 2013

Nominal GDP , Billion ( $ )

1,293 1,474 1,860 2,007 2,098

Real GDP growth,% change

-7,9 4.0 4.3 3.4 1.3

Population,millions

141.9 141.9 142.96 143.1 143.5

Unemployment 8.2 7.5 6.6 5.7 5.5

Inflation % 8.8 8.8 6.1 6.6 6.5

Exchange rate (per $1 )

31.76 30.36 29.35 31.07 31.82

Source: Federal State Statistics Service, The Central Bank of Russian Federation, 2014

The Russian Retail Sector

Russia’s retail trade turnover according to Accenture report of 19.09.2013

2006

€183,4bn

2013

€474,…

Culture and Trends of Russian Shoppers

Seven consumption styles• Thrifty

• Traditionalist

• Settled

• Self-realized

• Ambitious

• Spontaneous

• Innovators

The Russian Consumer base is divided sharply between brand-conscious high end consumers and price-sensitive low-end consumers, providing opportunities for different retail formats

Composition of average Household Expenditure

Types of Merchandise Retailers

Food Retailers General Merchandise Retailers

Department StoresSpecialty StoresDiscount Stores

Category SpecialistsOff-Price RetailersWarehouse Clubs

Value Retailers

Convenience StoresSupermarketsSupercenters

Warehouse Clubs

Food Retailers

Channel preference for food shopping channel where grocery purchasers do most of their food shopping

– Supermarkets

– Supercenters

– Warehouse Clubs

– Convenience Stores

-Conventional Supermarkets

Percentage Food : 70-80

Size (000 sq. ft.) : 35-40

SKUs(000) : 30-40

Variety : Average

Assortment : Average

Ambience : Pleasant

Service : Modest

Price : Average

Gross margin(%) : 20--22

Supermarkets

- Limited assortment supermarkets

Percentage Food : 80-90

Size (000 sq. ft.) : 7-10

SKUs(000) : 1-1,5

Variety : Narrow

Assortment : Shallow

Ambience : Minimal

Service : Limited

Price : Lowest

Gross margin(%) : 10-12

MAGNIT GROUP

Supercenter(Hypermarket)• Percentage Food : 30-40• Size (000 sq. ft.) : 160-200• SKUs(000) : 100-150• Variety : Broad• Assortment : Deep• Ambience : Average• Service : Limited• Price : Low• Gross margin(%) : 15-18

Auchan Group

Warehouse Club• Percentage Food : 60• Size (000 sq. ft.) : 100-150• SKUs(000) : 20• Variety : Broad• Assortment : Shallow• Ambience : Minimal• Service : Limited• Price : Low• Gross margin(%) : 12-15

Ozon.ru

Convenience Store• Percentage Food : 90• Size (000 sq. ft.) : 3-5• SKUs(000) : 2-3• Variety : Narrow• Assortment : Shallow• Ambience : Average• Service : Limited• Price : High• Gross margin(%) : 25-30

Lenta

Characteristics of General Merchandise Retailers

• Department Store

• Specialty Stores

• Discount Stores

• Category Specialists

• Off-Price Retailers

• Warehouse Clubs

• Values Retailers

Department Store

• Variety : Broad• Assortment : Deep to average• Service : Average to high• Price : Average to high• Size (000 sq. ft.) : 100-200• SKUs(000) :100• Location :Regional malls

TsUM

Discount Stores• Variety : Broad• Assortment : Average to shallow• Service : Low• Price : Low• Size (000 sq. ft.) : 60-80• SKUs(000) : 30• Location : Stand alone, power

strip centers

X5 Retail Group

Specialty Stores

• Variety : Narrow• Assortment : Deep• Service : High• Price : High• Size (000 sq. ft.) : 4-12• SKUs(000) : 5• Location : Regional

malls

Eldorado

Category Specialists• Variety : Narrow• Assortment : Very Deep• Service : Low the high• Price : Low• Size (000 sq. ft.) : 50-100• SKUs(000) : 20-40• Location : Stand alone,

power strip centersEuroset

Drugstore• Variety : Narrow• Assortment : Very deep• Service : Average• Price : Average to high• Size (000 sq. ft.) : 3-15• SKUs(000) : 10-20• Location : Stand alone,

strip centersRigla

Top 10 Retailers In Russia

MAGNIT

• The company was founded in 1994.

8256 convenience

stores

leading retailer in Russia by

sales.

2,019 locations in

Russia

230,000 employees

Auchan GROUP

World’s 11th largest

food retailer

1,600 store

2,000 franchises

and associates

300,000 employees

• The company was founded in 1961.

X5 RETAIL GROUP• The company was founded in 1961.

•Russian

foodretailer

2,545 store

109,000 employes