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FFRRAANNPPRRIIXX // LLEEAADDEERR PPRRIICCEETHE SALES REVITALISATION PROGRAMMETHE SALES REVITALISATION PROGRAMME

JM. DUHAMELChairman of Franprix& Leader Price

2IINNVVEESSTTOORR DDAAYY 0088

FRANPRIX/LEADER PRICE:2007 KEY FIGURES

900sq.m~ 447,000 sq.m€3,295m

489(o/w 268

integrated)

450sq.m~ 298,000 sq.m€2,193m

652(o/w 363

integrated)

Averagestore size

Total retail area31/12/07

Total 2007banner sales,

incl. VAT

Totalbanner

store base31/12/2007


A BUSINESS MODEL BASEDON A DUAL STRUCTURE

Franprix

Leader Price

95%

75%

Integrated stores (1)

363 FP/268 LP

>50%

Franchise stores (2)

289 FP/221 LP

0% to 50%

100%

RetailingWholesaling

(1) Fully consolidated

(2) Accounted for by the equity method if more than 20%-owned

Scope of operations


NET SALES BY BRAND (APRIL 2008)

40%56%

4%

86%

13%

1%

National brands


A VOLUME-DRIVEN CONCEPT

Simple, well-lighted, efficient stores

3,500 articleson the shelves

Optimised supply chain processes and costs

High volumes and fast SKU turnover

Highly competitive purchasing

LEADER PRICE


PRESENTING LEADER PRICE


“THE SHOP AROUND THE CORNER” TO SERVE OUR URBAN CUSTOMERS

FRANPRIX

Stores designed to optimise shopping times

A balanced mix of Leader Price and national brands

Easily accessible stores Flexible opening hours


PRESENTING FRANPRIX

Background

Strategy : - Price- Assortments- Advertising- Network

Results

Expansion

BACKGROUNDStrategy : - Price

- Assortments- Advertising- Network

Results

Expansion


BOTH BANNERS HAVE UNDERPERFORMED SINCE 2003-2004

-6

-4

-2

0

2

4

6

2001 2002 2003 2004 2005 2006

-15

-10

-5

0

5

10

15

2001 2002 2003 2004 2005 2006

10.86.9 7.4

4.4

-4.1

-9.4

3.82.3

0.7

-3.9-5.0

-2.4

SAME-STORE SALES GROWTH (%)


AS THE ENVIRONMENT GREWMORE COMPETITIVE…

National brands introduced

Extensive advertising

Sustained fast expansion1,622 additional storesfrom 2000 to 2007

Discount stores

Hypermarkets &Supermarkets

Value-line products developed

Private labels repositionedand extended


… NEITHER BANNER RESPONDED,ESPECIALLY LEADER PRICE

Low visibility and limited offering

Few promotions, if at all & Little banner advertising

Market positioning uncertain

Value line not very well known

Marketing drive lacking or weak

Background

STRATEGY : - Price- Assortments- Advertising- Network

Results

Expansion


2007: THE GROUP TOOK OVER MANAGEMENT OF BOTH BANNERS

Spring 2007: the Group takes over management of both banners

Sales revitalisation programmes launched• Late May for Franprix• Late July for Leader Price

Action plans focused on four key drivers:• Prices• Assortments• Advertising• The network

Background


Results

Expansion


RESTORING PRICE COMPETITIVENESSLEADER PRICE

Cut priceson targeted

product lines

Repositionprices on“Le Prix

Gagnant” lines

Background


Results

Expansion


RAISING THE VALUE LINE’S PROFILEAND MAKING IT MORE CREDIBLE

LEADER PRICE

July 07 Oct. 07 March 08 April 08

220 SKUs

300 SKUs

340 SKUs

370 SKUs

Today

400 SKUsX2X2

“Le Prix Gagnant” contribution toRevenue (incl. VAT) : 13.2%


Commitment

Pure design

Simplicity

A NEW GRAPHIC IDENTITYFOR “LE PRIX GAGNANT”…

LEADER PRICE

BEFORE

AFTER


… TO IMPROVE SHELF PROMINENCELEADER PRICE


REVISING AND EXTENDING THE OFFERING

400 new national brand items introduced

190 low-turnover Leader Price items eliminated

Assortments revamped according to three store profilesand three store sizes

Priority lines strengthened: smoked/cured fish,ready meals, charcuterie

FRANPRIX

In 2007


INTRODUCING SNACK SECTIONS

129 items (fresh products, beverages, dry groceries)

Eventually 143 snack items in all

3 menus

FRANPRIX

Affordable at €2.99

Classics at €3.99

Elaborate at €5.75


NEW MERCHANDISINGFOR THE SNACK SECTION

FRANPRIX

POS displays and advertising


Wine fair

Xmas

Valentine’sDay

Easter

RESPONDING TO CUSTOMER EXPECTATIONS

Findingthe right

products atthe right time

Background


Results

Expansion


LOW PRICE,PLUS HIGHQUALITY!


CUSTOMER-CENTRIC ADVERTISINGLEADER PRICE

Buy smart! Edgy graphics Shopper/product affinity


TO MAKEYOUR LIFE

EASIEREVERY DAY


WEEKEND SPECIALS ADVERTISED IN REGIONAL NEWSPAPERS AND POS DISPLAYS

FRANPRIX


IRTS INDIANA JONES TIE-IN:THE “BRAND ADVENTURE” GAME

Customers can participate in the Indiana Jones “Brand Adventure” game by filling out the form available in the catalogue,at check-out counters and on in-store displays.

The game will take place throughout the campaign on the Franprix site, enabling us to build a customer database and support targeted SMS and direct-mail programmes.

FRANPRIX


WWW.FRANPRIX.FR IS CONSTANTLY UPDATED WITH THE LATEST NEWS

FRANPRIX


SUSTAINED ADVERTISING SPEND

Catalogues

Regional newspapers

Radio 2006 2007 2008 est.

+49%+49%

+31%+31%

Background


Results

Expansion


OPTIMISING IN-STORE OPERATING EXCELLENCE

Action 1

TRAINING

Raise store staff awareness

Enhance relationswith store managers

Predict overstocking/out-of-stock issues

Shopper welcomeShopper welcome

ManagementManagement

Order management

Order management


OPTIMISING IN-STORE OPERATING EXCELLENCE

Action 1 Action 2

RAISESTANDARDS

Reduce the number of storesper manager to 8 from 14Introduce strict cleaningschedules

Create POS proceduresfor supporting the entirepromotional plan

For store managersand section heads

Store conditions and upkeep

Store conditions and upkeep

Supporting the ad campaigns

Supporting the ad campaigns

Objective-based bonuses

Objective-based bonuses

Background


RESULTSExpansion


The strategyhas startedto pay off


FAST SALES RECOVERY AT BOTH BANNERS

-8%

-4%

0%

4%

8%

SAME-STORE SALES GROWTH

Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08

-16%

-12%

-8%

-4%

0%

4%

Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08

1,3%

5,8%

Background


Results

EXPANSION


AN AMBITIOUS EXPANSION PLAN TO BUILD OUT EACH BANNER’S STORE BASE TO 1,000 UNITS

2007

652

2007

489

2012/2014

2012

1,000

1,000


THREE KEY DEPLOYMENT DRIVERSLEADER PRICE

Expansion will be led by master franchisees, supported by a Leader Price expansion team

Each master franchisee has an assigned territory, to ensure aligned deployment

Expansion will be nationwide


FOUR KEY DEPLOYMENT DRIVERS

Expansion will advanceby store clusters

Focused on high-densityurban neighbourhoods

Three priority regions

FRANPRIX

Momentum led by master franchisees supported by an in-house team


ROLE OF EXPANSION SUPPORT

CHANNEL AND OPTIMISE THE EXPANSION OF THE FRANPRIX AND LEADER PRICE NETWORKS

Look for locations suitablefor a 300 sq.m store, while planning future extensions

Get involved in every applicationto build or acquire food retailing spacein France

Data interchangewith other Casino banners

Collect project dataand support implementation

Look for opportunities

Understandthe geography

Compare opportunities

Centraliseinformation

Documents

04 FP LP - Groupe Casino · 6.9 7.4 4.4-4.1-9.4 3.8 2.3 0.7-3.9-5.0-2.4 ... targeted SMS and direct-mail programmes. FRANPRIX. INVESTOR DAY 08 32 IS CONSTANTLY UPDATED WITH THE LATEST