Rating of FMCG retailers in Russia

Transcription

1 In 27, research products of the information agency "INFOLine" were appreciated by the leading European companies. Agency "INFOLine" was made into a single association of consulting and marketing agencies of the world "ESOMAR". In accordance with the rules of the association all the products of the agency "INFOLine" certified by European standards, ensuring that our customers receive a quality product and sales service through further consultations at the request of customers. Periodic review of industry Rating of FMCG retailers in Russia October 212 Demo-version Statistical data on retail trade in Russia and regions Changing the main indicators of retail trade in Russia Review of developments in the retail market of Russia, took place in October 212 Rating of FMCG retailers by the number of stores, selling area in October 212 and revenues in 2, I half and 9 months 212

2 Contents branch review "Rating retailers FMCG of Russia" INFOLine IA continues with its 213 subscription campaign...3 Introduction...4 Rating of FMCG retailers in Russia...5 Performance results of TOP 12 FMCG chains...5 The rating of FMCG retail chains of Russia in terms of number of stores...9 The rating of FMCG retail chains of Russia in terms of trading floorspace... The rating of FMCG retail chains of Russia in terms of net sales Section I. Development of retail trade in Russia...21 Macroeconomical figures of the retail trade... 2 Leading indicator of retail trade development State regulation of retail trade The structure of retail sales by the categories of goods The structure of retail sales by the categories of trading units Regional structure of retail sales...39 Inflation at the food market Incomes and expenditures of the population... 5 Consumer expectations and confidence of population Section II. Other events of the retail trade...56 Activities of INFOLine IA specialists Section III. Events and development plans of FMCG retail chains...59 X5 Retail Group N.V. / Pyaterochka, Perekrestok, Karusel and Perekrestok-express trading chain X5 Retail Group N.V. / Pyaterochka trading chain Franchise partners of X5 Retail Group N. (Pyaterochka chain) X5 Retail Group N.V. V. / Perekrestok retail chain X5 Retail Group N. V. (Express-retail) / Perekrestok express trading chain, Citymag, Kopeika X5 Retail Group N. V. / Karusel retail chain Magnit, JSC / Magnit retail chain... 7 Auchan / Auchan and Atac trading chain Auchan Ltd. /Auchan trading chain Atac-Rossiya, Ltd. / Atac retail chain Metro Group / Metro Cash&Carry and Real retail chains...8 METRO Cash and Carry, LTD. / Metro Cash&Carry retail chain... 8 Real-Hypermarket, LTD. / real,- retail chain Diksi Group, JSC / Diksi trading chain, Megamart, Minimart, Viktoria-kvartal, Deshevo, Semeynaya Kopilka, Viktoria, Kesh Diksi Group, JSC / Diksi trading chain, Megamart, Minimart Victoria, GK / retail chain Victoria-kvartal, Deshevo, Viktoria, Kesh, Semeynaya Kopilka O'Key, LTD. / O Key retail chain Lenta, LTD. / Lenta Cash&Carry retail chain Sedmoi Kontinent, JSC / Sedmoi Kontinent, Nash

3 Periodic review of industry "Rating retailers FMCG of Russia" October 212 INFOLine IA continues with its 213 subscription campaign In November 212 INFOLine IA pursues a campaign for conclusion of subscription agreements for Rating of FMCG Retail Chains branch survey for the year of 213. In 212 we continued to improve the quality of this product and increased the number of chains, for which we monitored their operational indexes, up to 15 (as of the fourth quarter of 212 there were added such chains as Verniy and K-Ruoka), as well as expanded the set of economic situation indicators. Please, pay attention that if the subscription agreement is signed before 3 November 212 the customers of INFOLine IA are entitled to special subscription terms with fixed prices for 213: roubles per month on condition of periodic delivery; 6 roubles per month on condition of 213 annual subscription; 6 roubles per year on condition of one-off payment; After 1 December 212 the subscription cost will be increased up to: 12 roubles per month on condition of periodic delivery; 7 5 roubles per month on condition of 213 annual subscription; 75 roubles per year on condition of one-off payment. Also beginning from 1 January 213 an additional option will be available for the subscribers of this periodical survey a concise version of the rating in MS PowerPoint presentation format. For more detailed information on the new survey s format, subscription terms and other INFOLine IA products related to retail trade and consumer market, do not hesitate to contact our managers: Darya Feschenko (moscow@infoline.spb.ru), tel/fax , extension 142 Christine Savelyeva (mail@infoline.spb.ru), or , extension 143. We are looking forward to continuation of our fruitful cooperation next year. Burmistrov Mikhail CEO "INFOLine-Analitic" Fedyakov Ivan Vadimovich CEO IA "INFOLine" 3

4 Introduction The branch survey The Rating of FMCG retail chain of Russia contains information about the development of the retail trade, as well as the overview of events that took place at the Russian retail market during the period under review (for the present survey this is October 212), the information related to the results of operating, financial and investment activities of FMCG chains in Russia, as well as the rating of 12 largest FMCG retail chains of Russia. The survey is prepared on the basis of integrated set of data sources: Regular monthly polling of more than 15 retail chains of Russia by the experts of INFOLine IA; Materials from MSM (printed press, electronic MSM, federal and regional information agencies); Information materials of the retail chains and supplying companies (press-releases, Web-site content, yearly and quarterly statements, trade literature regarding the securities issue and investment memorandums); Financial statements of the chains according to international standards (audited and managerial); At the present time a large variety of specialist in Russia require immediate and true-to-life coverage of events at the Russian retail market: Top-managers, the specialist of marketing and sale department of companies that produce consumer goods; Top-managers, the specialist of marketing and retail chains development departments; The specialists of sale departments of companies that produce goods for retail trade and offer services for various trade chains. Private and institutional investors, which own or are planning to acquire the assets in Russian retail chain trade. The principal objective of The Rating of FMCG retail chains in Russia is to satisfy the demand for immediate, statistical and analytical information regarding the Russian retail trade market and FMCG chains for the specialists of the above-mentioned specializations. To be able to receive the forthcoming issues of the survey, please, forward a request to INFOLine IA, mail@advis.ru or by fax ( ) and conclude a contract for our information services. 4

5 Rating of FMCG retailers in Russia Performance results of TOP 12 FMCG chains Periodic review of industry "Rating retailers FMCG of Russia" October 212 Performance results of TOP 12 FMCG chains in Russia 2 In October 212 the number of trading units of TOP-12 FMCG retailers increased by * units; all in all, during January-October by * units. At the same time in October 212 the growth in the total trading space was about * thousand sq. m. Altogether, during January-October 212 the total trading space increased by *thousand square sq. m. Dynamics of number of trading units and their floorspace of 12 largest retailers of Russia in I-6 I-8 I- III- V- V IX- II- Number of trading units 4 3 XI- I- III- V- V IX- II- XI- I-12 III- V Floorspace of trading units, thousand square meters V IX- XI- II Dynamics of number of trading units and their floorspace of 12 largest retailers of Russia in Number of trading units Floorspace of trading units, thousand square meters The total number of stores among TOP-12 FMCG retailers as of 1 November 212 was *, with total trading floorspace of * thousand sq. m. Development of hypermarket format 3 In October 212 the number of hypermarkets among TOP-12 FMCG retailers decreased by *, and the trading space decreased by * thousand sq. m. Altogether, during January-October 212, the number of trading units increased by *, while the trading space increased by *thousand sq. m. Dynamics of the net hypermarkets number increase (beginning with April 212 the list was expanded from 1 to 12) among the largest retailers of Russia in on monthly basis, number of outlets I II IIII IV V VI VII VII IX X XI XII -2 The following units were commissioned in October 212: 3 Magnit Semeiniy hypermarkets in Rostov, Ulyanovsk and Samara regions, a Lenta hypermarket in Omsk region 1 Datas was corrected as a result of 9 months of 212. Hereinafter the data for Х5 Retail Group and Magnit is presented as it was available for the date of this survey s preparation. 2 Datas was corrected as a result of 9 months of 212. Hereinafter the data for Х5 Retail Group and Magnit is presented as it was available for the date of this survey s preparation. 3 Datas was corrected as a result of 9 months of 212. Hereinafter the data for Х5 Retail Group and Magnit is presented as it was available for the date of this survey s preparation. 5

6 Dynamics of number of hypermarkets and their floorspace of 12 largest retailers of Russia in Number of hypermarkets, units I-6I-7I-8I-9I- II- III- IV- V- VI- Floorspace of trading units, thousand square meters VII- VI IX- X- II- XI- XII-I- II- III- IV- V- VI- VII- VI IX- X- II- XI- XII-I-12 II- 12 III- IV- V VI- 12 VII- VI IX- X- XI- 12 II The total number of hypermarkets among TOP-12 FMCG retailers as of 1 November 212 was *, with total trading floorspace of * thousand sq. m. Research (full version) includes also the description of development of supermarket format, discounter 4 format and convenience store format The rating of FMCG retail chains of Russia in terms of number of stores INFOLine IA has been monitoring the dynamics of commissioning of FMCG stores since 26. At the present time we monthly receive the data regarding the number of stores dynamics for 12 largest FMCG retailers of Russia (since April 212 the number of monitored retailers increased fom 1 to 12). The dynamics of number of trading units among the largest retailers 5 The dynamics of number of stores of the largest retailers for the period of are represented in the table below. Number of stores of the largest FMCG chains during as of the end of the period, (units) Name X5 Retail Group N.V. (TH Prekrestok, JSC) Magnit, JSC (Tander, JSC) Brand Main formats6 2 9m 12 Oct.12 Dynamics in October Pyaterochka D * * * * Perekrestok S * * * * Karusel, Pyaterochka Maxi H * * * * Perekrestok-Express, Pyaterochka- Express C * * * * Kopeika, Kopeika Super C, S * * * * Total Company * * * * Magnit D * * * * Magnit cosmetic C * * * * Magnit Semeiny H * * * * Hypermarket Magnit H * * * * Total Company * * * * Auchan, LTD. Auchan, Auchan-City, Raduga H * * * * Metro C&C, LTD. Metro C&C, Metro Punct S, H * * * * Megamart, Minimart, Diksi D, S, H * * * * Victoria, Cash, Deshevo, Kvartal, Semeinaya Diksi group, JSC C, S, H * * * * kopilka Total Company * * * * O Key, LTD. O Key, O Key-express S, H * * * * Lenta, LTD. Lenta H * * * * Sedmoi Kontinent, Nash hypermarket C, S, H * * * * Sedmoi Kontinent, JSC Mosmart, Maxi, Express H, S * * * * 4 As it has come to be generally accepted by the international retailers the format of discounter should meet the one commodity - one demand requirement. But it is important to emphasize that in Russia the discounter format, as such, is non-existent. At the same time the specialists of INFOLine IA would like to distinguish two subformats of the convenience store format: soft discounters, for the formats of the number of the largest Russian players, such as Pyaterochka, Diksi, Magnit, Monetka, Kopeika, Maria-Ra and others, and convenience stores. 5 The rating was updated according to results of the first half of 212 regarding the revenue of chains in 2. It presents chains with sales revenue of more than 3 billion roubles in 2. 6 Legend: D - discounter, H - hypermarket, S - Supermarket, C convenience store 6

7 Periodic review of industry "Rating retailers FMCG of Russia" October 212 Name Brand Main formats6 2 9m 12 Oct.12 Element-Trade, LTD. Monetka, Monetka Super D, S, H * * * * GK Holiday (GK Holiday, LTD., Company Holiday, LTD., Kora-TC, LTD.) Holiday Classic, Holdy, Sibiriada, Kora, Palata C, D, S, H * * * * Maria-Ra, LTD. (Roznitsa-1, LTD.) Maria-Ra D, S, H * * * * Real-Hypermarket, LTD. Real H * * * * HyperGlobus, LTD. Globus H * * * * Corporation Grinn, JSC Liniya S, H * * * * Atak-Rossiya, LTD. Atak S (D) * * * * Norodnaya 7Ya, Idea, Spar C, S * * * * Dynamics in October TD Intertorg, LTD. Norma S * * * * Billa, LTD. Billa (Citystore7) S * * * * Gorodskoy supermarket, LTD. Azbuka Vkusa S * * * * Supermarket Kirovskiy, CJSC (Lev, LTD.) Kirovskiy C, S * * * * System RegionMart, LTD. Chibis, Polyana, Bonus, Sputnik D, S, H * * * * Data source: INFOLine IA, according to the companies data Research (full version) includes the rating of TOP largest FMCG chains The rating of FMCG retail chains of Russia in terms of trading floorspace INFOLine IA has been monitoring the dynamics of trading floorspace in FMCG retail since 26. At the present time we monthly analyze the data regarding the changes in trading space for 12 largest FMCG retailers of Russia (since April 212 the number of monitored retailers increased from 1 to 12). The results of 28-2 The increase of concentration in retail sector became the key trend of 2, determined by decreasing growth rates of the majority of the second echelon chains and higher development rates of the largest multiformat chains (Magnit and X5 Retail Group), the retailers, which develop large-format trading units (Auchan, Metro, O Key), as well as federal retailers with their key format of the convenience store (Monetka). At the same time the two largest retail companies of Russia (Magnit and X5 Retail Group) occupy *% (in 2 *%, in 29 *%, in 28 - *%) of the total new trading floorspace (overall value of the floorspace growth among 1 largest retailers, which increased them according to results of 2, not including chains, which decreased their trading floorspace) Dynamics of trading floorspace growth of 1 major retailer of Russia (not considering retailers with decreased floorspace) in 28-2, ths.sq.m Magnit X5 Retail Group Auchan Group Metro Group O'Key Monetka Diksi Lenta Other chains Net growth (r The results of January-October of 212 The beginning of 212 was marked by announcement of a number of possible important transactions at the M&A market. In February 212 it became known that Sberbank-Capital put on sale % shares of Kaliningrad chain Vester, 51% of which are owned by the bank. Starting from March 212 there was registered a trend towards slowing 7 Don't include in common number of stores. They are in a rebranding stage 7

8 Date March 212 April 212 Deal s type Subject and object of the deal Transfer of 13 outlets of Vesta leasehold retail chain rights Merger 12 Citystor outlets Owner of the object of net trading floorspace growth rates, which is mainly connected with decrease in number of Vester chain hypermarkets because of unstable financial situation of the company and the necessity to settle the debt liabilities to Sberbank JSC. As of 1 November 212 the company owned 29 outlets in Kaliningrad region and Republic of Belarus, the other facilities of the chain in regional areas of Russia were closed (Belgorod region, Voronezh region, Rostov region, Yaroslavl region and others) and sold over to Europe chain (1 hypermarket in Stariy Oskol in Belgorod region) and Lenta chain (4 outlets in Voronezh, Yaroslavl and Orenburg regions). Magnit retail chain is also considering acquisition of Vester s facilities in Voronezh and Belgorod regions. Major М&А deals in FMCG retail trade of Russia in 212 Location of trading outlets Buying company Deal price 8, million US dollars. Vesta Plus LLC St. Petersburg TD Intertorg LLC - ENKA SC LLC Moscow and Moscow region Billa LLC - Description of the deal In March 212 TD Intertorg LLC rented 13 outlets of Vesta retail chain with floorspace of more than 4 quarter meters each, for opening its own stores at those floorspace during two-three months. The sum of the deal and rent rate are kept confidential. Besides, in April 212 Billa retail chain closed a transaction acquisition of 12 outlets of Citystor chain in Moscow region (formerly Ramstor of Enka TC LLC) and % of shares of Mmos LLC and Dmos LLC (belong to the same group as Citystor retail chain). The remaining 5 stores of the chain were closed during April 212. Rebranding was completed in July 212, when the 12th Billa supermarket was opened at the site of ф former Citystor outlet. * * * * * * * * Data source: INFOLine IA data In March 212 Metro Cash&Carry Company announced the beginning of development of a new franchisee chain. A chain of convenience stores is to operate under the name of Fasol (Beans), its sign has been designed in green and orange; besides the chain's name it contains the product basket of the supermarket. As an experiment, 2-3 first outlets will be opened by Metro Cash&Carry. The trading floorspace is to reach from 5 to square meters. It should be reminded that in 212 Metro Group plans to open in Russia 2-3 its own convenience stores with floorspace of 4- square meters, and later on to develop this format as a franchise. The first two franchisee Fasol stores are to be opened in St. Petersburg in June 212. And in September 212 another 5 stores of the chain were opened in Rostov-on-Don. As of November 212 the number of Fasol franchisee outlets came up to 15: in St. Petersburg and in Rostov region 5. In December 212 the first hypermarket of K-RUOKA retail chain will be opened in St. Petersburg. Further on it is planned to open another 2 hypermarkets before the beginning of 213. Besides, in 213 it is planned to commission the first hypermarkets of this chain in Moscow. The new chain will be developed in Russia by the Finnish group Kesko (the brand of Kesko Food). Oleg Buyalskiy, a former board member of Auchan Russia and an operating director of Lenta, was appointed the head of Kesko food division in Russia (Kesko Food Rus LLC). In Finland the chain s hypermarkets operate under the sign of К-CITYMARKET, but for Russia it was decided to name the chain as K-RUOKA 9. In October of the largest chains increased their trading floorspace by * thousand sq. m. The dynamics of monthly floorspace growth of the major 12 chains are represented at the diagram.the floorspace growth was provided by commissioning of Auchan, Metro C&C, Okey, Delta, Euroros, Globus, KIrovsky and Magnit hypermarkets, outlets in the formats of discounter and convenience store by Magnit, Pyaterochka, Diksi, Monetka, Maria-Ra and Holiday GC (Sibiriada, Planeta Holiday, Holdi) and others. 8 Estimation of INFOLine IA specialists. 9 K is the first letter in the name Kesko. К, as the first letter, is present in the names of many chains that belong to Kesko Corporation. Probably, you are familiar with the chain of construction hypermarkets K-RAUTA. Finnish word RUOKA means FOOD. The represented data include 12 chains of the monthly branch survey of INFOLine IA: TOP -92 chains with revenue over 3 billion roubles, as well as other FMCG chains, including the members of Union of Independent Chains of Russia and Sistema T3S. Floorspace growth information for the 1 st quarter of 212 related to public companies Х5 Retail Group, Magnit and Diksi is offered according to the schedule of reports' disclosure (for Diksi GC third ten-day period of the month following the accounting month, Magnit second ten-day period of the month following the accounting month, and for Х5 quarterly). 8

9 Periodic review of industry "Rating retailers FMCG of Russia" October Dynamics of net trading floorspace growth of 12 largest retailers of Russia in 2-212, per month (thousand square meters) Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sept. Oct. Nov. Dec Structure of floorspace growth for 12 major retailers of Russia (without retailers with reduced floorspace) in the 9 months 2, % Other chains Magnit X5 Retail Group Structure of floorspace growth for 12 major retailers of Russia (without retailers with reduced floorspace) in the 9 months 2, % Magnit Auchan Group X5 Retail Group Lenta Victoria Diksi Mone tka Metro Group O'Key Other chains Lenta Auchan Group Metro Group Victoria Diksi Monetka O'Key Research (full version) includes the rating of TOP largest FMCG chains The dynamics of trading floorspace of the largest retailers 12 The dynamics of trading floorspace of the major retailers for the period of are represented in the table below (since April 212 the list of retailers was expanded to 12). Name Brand Main 2 9 m 12 Oct.12 Dynamics formats13 in October Pyaterochka D * * * * Perekrestok S * * * * X5 Retail Group N.V. (TH Prekrestok, JSC) Karusel, Pyaterochka Maxi H * * * * Perekrestok-Express, Pyaterochka- Express C * * * * Kopeika, Kopeika Super C, S * * * * Total Company C, S, D, H * * * * Magnit D * * * * Magnit cosmetic C * * * * Magnit, JSC (Tander, JSC) Magnit Semeiny H * * * * Hypermarket Magnit H * * * * Total Company D, C,H * * * * Auchan, LTD. Auchan, Auchan-City, Raduga H * * * * Metro C&C, LTD. Metro C&C, Metro Punct S, H * * * * Megamart, Minimart, Diksi D, S, H * * * * Diksi group, JSC Victoria, Cash, Deshevo, Kvartal, Semeinaya kopilka C, S, H * * * * Total Company * * * * O Key, LTD. O Key, O Key-express S, H * * * * Lenta, LTD. Lenta H * * * * Sedmoi Kontinent, JSC Sedmoi Kontinent, Nash hypermarket C, S, H * * * * 12 The rating was updated according to results of the first half of 212 regarding the revenue of chains in 2. It presents chains with sales revenue of more than 3 billion roubles in Legend: D - discounter, H - hypermarket, S - Supermarket, C convenience store 9

10 Name Brand Main 2 9 m 12 Oct.12 Dynamics formats13 in October Mosmart, Maxi, Express H, S * * * * Element-Trade, LTD. Monetka, Monetka Super D, S, H * * * * GK Holiday (GK Holiday, LTD., Company Holiday, LTD., Kora-TC, LTD.) Holiday Classic, Holdy, Sibiriada, Kora, Palata C, D, S, H * * * * Maria-Ra, LTD. (Roznitsa-1, LTD.) Maria-Ra D, S, H * * * * Real-Hypermarket, LTD. Real H * * * * HyperGlobus, LTD. Globus H * * * * Corporation Grinn, JSC Liniya S, H * * * * Atak-Rossiya, LTD. Atak S (D) * * * * TD Intertorg, LTD. Norodnaya 7Ya, Idea, Spar C, S * * * * Norma S * * * * Billa, LTD. Billa (Citystore14) S * * * * Gorodskoy supermarket, LTD. Azbuka Vkusa S * * * * Supermarket Kirovskiy, CJSC (Lev, LTD.) Kirovskiy C, S * * * * System RegionMart, LTD. Chibis, Polyana, Bonus, Sputnik D, S, H * * * * Data source: INFOLine IA The rating of FMCG retail chains of Russia in terms of net sales 15 Legal name X5 Retail Group N.V. Magnit. JSC Diksi group. JSC Financial performance results III quarter and 9 and months 212 for public companies are represented in the table below. Financial performance (without VAT) of the largest FMCG chains during 2- months 212, billion roubles. Brand Main formats 16 Sales during III q 12 III q 212 vs III q 2, % LFL III q 212, % Sales during 9 m 12 9m 212 vs 9m 2, % LFL 9m 212, % Sales during m 12 m 212 vs m 2, % Pyaterochka D * * * * * * * * Perekrestok S * * * * * * * * Karusel, Pyaterochka Maxi H * * * * * * * * Perekrestok-Express, Pyaterochka- М Express, Kopeika * * * * * * * * On-line retail - * * * * * * * * Total Company D, S, H, M * * * * * * * * Magnit D * * * * * * * * Magnit-Cosmetic C * * * * * * * * Magnit Seminy S * * * * * * * * Hypermarket Magnit H * * * * * * * * Total Company D, H * * * * * * * * Diksi C * * * * * * * * Kvartal, Deshevo C, D * * * * * * * * Minimart S * * * * * * * * Victorya S * * * * * * * * Megamart H * * * * * * * * Kesh H * * * * * * * * Total company C, D, S, H * * * * * * * * O Key, LTD. O Key, O Key-express S, H * * * * * * * * Data source: INFOLine IA Dynamics of net sales (without VAT) of the largest FMCG chains in 2-212, billion roubles Main Legal name Brand formats 17 Data 2 I half 212 Karusel, Pyaterochka Maxi H IFS, I half MR * * Perekrestok S IFS, I half MR * * Perekrestok-Express, Pyaterochka- X5 Retail Group N.V. (TH C IFS, I half MR Express * * Prekrestok, JSC) Pyaterochka D IFS, I half MR * * Kopeika, Kopeika Super C, S IFS, I half MR * * Total company C, S, D, H IFS, I half MR * * Magnit, JSC (Tander, JSC) Magnit D IFS, I half MR * * 14 Don't include in common number of stores. They are in a rebranding stage 15 The rating was updated according to results of the first half of 212 regarding the revenue of chains in 2. It presents chains with sales revenue of more than 6 billion roubles in Legend: D - discounter, H - hypermarket, S - supermarket, C convenience store 17 Legend: D - discounter, H - hypermarket, S - supermarket, C convenience store

11 Periodic review of industry "Rating retailers FMCG of Russia" October 212 Main Legal name Brand formats 17 Data 2 I half 212 Magnit cosmetic C IFS, I half MR * * Magnit Semeiny H IFS, I half MR * * Hypermarket Magnit H IFS, I half MR * * Total company C, D, H IFS, I half MR * * Auchan, LTD. Auchan, Auchan-City, Raduga H RAS * * Metro C&C, LTD. Metro C&C, Metro Punct S, H IFS * * Megamart, Minimart, Diksi D, S, H IFS, 2- IFS pro-forma, I half 212 * * Diksi group, JSC Victoria, Cash, Deshevo, Kvartal, C, S, H (consolidate) Semeinaya kopilka * * Total company C, D, S, H IFS, 2 and I half IFS (consolidate) * * O Key, LTD. O Key, O Key-express S, H IFS * * Lenta, LTD. Lenta H MR, estimate by RAS * * Sedmoi Kontinent, JSC Sedmoi Kontinent, Nash hypermarket C, S, H IFS, RAS, 2 and I half MR * * Spar (all companies) Spar, EUROSPAR, Spar-express C, S, H MR, 29 - estimate * * Element-Trade, LTD. Monetka, Monetka Super D, S, H RAS, MR * * Maria-Ra, LTD. (Roznitsa-1, Maria-Ra D, S, H MR LTD.) * * Real-Hypermarket, LTD. Real H IFS * * GK Holiday (GK Holiday, LTD., Holiday Classic, Holdy, Sibiriada, MR, RAS, 2- estimate IA Company Holiday, LTD., Kora- C, D, S, H Kora, Palata "INFOLine" * * TC, LTD.) HyperGlobus, LTD. Globus H RAS, 2- estimate IA "INFOLine" * * Corporation Grinn, JSC Liniya S, H MR * * RAS, 29,2 - estimate IA "INFOLine", Atak-Rossiya, LTD. Atak S (D) 2- MR * * TD Intertorg, LTD. Norodnaya 7Ya, Idea, Spar, Norma C, S RAS, MR * * Gorodskoy supermarket, LTD. Azbuka Vkusa S IFS, RAS, MR, estimate IA "INFOLine" * * Billa, LTD. Billa (Citystore 18 ) S RAS, MR * * Supermarket Kirovskiy, CJSC Kirovskiy C, S MR * * (Lev, LTD.) System RegionMart, LTD. Chibis, Polyana, Bonus, Sputnik D, S, H MR, 29-2 estimate on total turnover * * Research (full version) includes the rating of TOP largest FMCG chains 18 Don't include in common number of stores. They are in a rebranding stage

12 Section I. Development of retail trade in Russia Macroeconomical figures of the retail trade 25 The retail trade sales volume in 2 amounted to *billion roubles, which, in terms of commodities mass was *% against the figures of 2. In January-August 212 trade sales volume was *billion roubles, which was *% as compared to January-August 2. In September 212 trade sales volume was *billion roubles, which was *% as compared to September 2. Dynamics of the main figures of the consumer market in , in % as to the corresponding period of the previous year I 5 II 5 III 5 IV 5 I 6 II 6 III 6 IV 6 I 7 II 7 Growth of retail trade sales Growth of food commodities sales Growth of non-food commodities sales III 7 IV 7 I 8 II 8 III 8 IV 8 I 9 II 9 III 9 IV 9 I II III IV 2 I II III IV 2 I II III 12 Leading indicator of retail trade development I 26 II 26 The Index of Business Confidence in Russia III 26 IV 26 I 27 II 27 III 27 IV 27 I 28 II 28 III 28 IV 28 I 29 II 29 III 29 According to results of the polls conducted by FSGS (Federal Service of Government Statistics) the Index of Business Confidence 19 decreased by pp in the first half of 29 (initial period of the recession in 29), upon which it began to recover and according to results of the third quarter of 212 the index increased by 9 pp against the first quarter of 29. However, the index has not yet reached the pre-crisis level of confidence and it is unlikely to reach the level of in the near future because of worsening of the overall macroeconomic situation. As for the evaluation of the economic situation in Russia as a whole, the economic situation 2 in Russia, according to FSGS data, by 2 pp exceeded the first quarter of the recessionary 29, when actual changes of economic situation came up to -12 pp. IV 29 I 2 II 2 III 2 IV 2 I 2 II 2 III 2 IV 2 I 212 II 212 III I 26 II 26 III 26 The evaluation of the economic situation in Russia IV 26 actual changes prospective changes I 27 II 27 III 27 IV 27 I 28 II 28 III 28 IV 28 I 29 II 29 III 29 IV 29 I 2 II 2 III 2 IV 2 I 2 II 2 III 2 IV 2 I 212 II 212 III The index of entrepreneurial confidence in retail trade is calculated as the arithmetic mean value of evaluation balances for the level of storage stock (with the opposite sign), changes in economic situation during the current quarter as compared with the previous one and expected changes in economic situation during the coming quarter (in percentage points). The seasonal component in time series of the index is not excluded. 2 The balance of the index changes evaluation, determined as the difference between respondents shares which distinguished "improvement" and "decline" of the index in comparison with the previous quarter (in percentage points). 12

13 State regulation of retail trade Periodic review of industry "Rating retailers FMCG of Russia" October 212 Trade Act On 7 November 212 deputies of Kursk Regional Duma introduced to State Duma their Draft Law No On Amendments to the Federal Act On Principles of State Regulation of Trade in Russian Federation, proposing to expand the state regulation of prices on socially significant commodities in emergency situations. Among other things the authors of the draft consider it necessary to partly rewrite the article related to intervention of the state into the price policy in case when the prices on essential consumer goods increased by 3% during 3 days. The current version provides for 9-day period, during which the state can determine the ceiling retail prices. Research (full version) includes information on key events in the state regulation of retail trade of Russia The structure of retail sales by the categories of goods 25 2 Structure of retail trade turnover by commodity groups in (by months), billion roubles food commodities non-food commodities 15 5 I- II- III- IV- V- VI- VII- VIII- IX- X- XI- XII- I-12 II-12 III-12 IV-12 V-12 VI-12 VII-12 VIII- 12 In September 212 the share of food commodities came up to *%, and share of non-food commodities in retail trade turnover of in Russia came up to *% (in September 2 *% and *% accordingly). Research (full version) also consists the dynamics of sales of the main food and nonfoods The structure of retail sales by the categories of trading units % 8% 6% 4% 2% The structure of retail trade sales according to the categories of trading units according to results of 9 months 212 continues to demonstrate the decrease of the share of the marketplaces (by.9 percentage points) and individual entrepreneurs (by.7 percentage points). The structure of retail trade sales according to the categories of trading units in , % IX-12 % months 2 9 months 212 Marketplaces Individual entrepreneurs outside the marketplaces Small enterprises Large and medium organizations (including chains) 13

14 Research (full version) also consists information on structure of sale of the goods in the retail markets and fairs, detailed information on unorganized trade: number of the markets, trading places on them, structure of the markets and the managing subjects presented on them and other. Regional structure of retail sales Structure of retail sales according to federal districts of RF in Jan.-Sep 212, % Regional structure of retail trade sales in Russia features irregularity: *% retail trade sales in January-September 212 falls on territorial subjects of RF (Moscow, Moscow region, St. Petersburg, Sverdlovsk region, Krasnodarskiy Territory, Samara region, Republics of Tatarstan and Bashkortostan, Tyumen region, Chelyabinsk and Rostov regions). Samara reg. Structure of retail sales according to territorial subjects of RF in Jan.-Sep 212, % South Federal District North-Caucasian Federal District Privolzhsk Federal District Ural Federal District Resp. Tatarstan Rostov reg. Tyumen reg. Resp. Bashkortostan Chelyabinsk reg. Others Krasnodar Ter. Northwest Federal District Siberian Federal District Sverdlovsk reg. Central Federal District Far Eastern Federal District St. Petersburg Moscow reg. Moscow Inflation at the food market Dynamics of the prices for articles of food In October 212 the prices on the majority of vegetables and fruit decreased. Most noticeably they decreased for white fresh cabbage by *%, bulb onion by *%, carrots by *%, potatoes - by *%, grapes and beet-root by *% and *% respectively. At the same time prices on bananas increased by *%, oranges by *%, lemons - by *%. Rates of food commodities prices variations in , in % vs. previous year - meat and poultry sunflower oil bakery products eggs milk and diary products butter sugar Fruit and vegetables Sep. 12 Research (full version) also consists the information on dynamics of cost on key consumer products on Russia and 8 regions of Russia 14

15 Incomes and expenditures of the population Periodic review of industry "Rating retailers FMCG of Russia" October 212 According to results of 2 the growth of actual cash earnings was at the level of actual wages, then according to results of 2 it considerably slowed down. Dynamics of labor wages and per capita incomes of the population from 2 to 2 are represented in the diagrams below Dynamics of actual wages and actual income of population in 2-212, % as to the previous period Actual wages Actual cash income m 212 Research (full version) also consists the structure of the monetary income of the population and structure of their use, results of the skan-panel of households following the results of the complete period, etc. Consumer expectations and confidence of population The results of the polls conducted by the Federal State Statistics Service among 5 people at the age of 16 and older, residing in all RF territorial subjects, during aftercrisis period starting from the second quarter of 29 and till the second quarter of 2, the index reflecting collective consumer expectations of the population21 demonstrated growth and according to results of third quarter came up to (*%). However, in the fourth quarter of 2 and the first quarter of 2 the dynamics of the consumer expectations index were negative and just in the second quarter of 2 the index grew up by 4 pp to (- 9%), and in the third quarter of 2 for another 2 pp to (*%), in the fourth quarter of 2 it remained at the same level (*%), but in the first quarter of 212 somewhat improved, growing by 2 pp (*%), also continuing its growth in the second quarter of 212 (*%) and in 3 rd quarter 212 demonstrated decrease by 2pp (*) again Consumer confidence index for Russia, I qtr. 2 II qtr. 2 III qtr. 2 I qtr. 21 II qtr. 21 III qtr. 21 I qtr. 22 II qtr. 22 III qtr. 22 I qtr. 23 II qtr. 23 III qtr. 23 I qtr. 24 II qtr. 24 III qtr. 24 I qtr. 25 II qtr. 25 III qtr. 25 I qtr. 26 II qtr. 26 III qtr. 26 I qtr. 27 II qtr. 27 III qtr. 27 I qtr. 28 II qtr. 28 III qtr. 28 I qtr. 29 II qtr. 29 III qtr. 29 I qtr. 2 II qtr. 2 III qtr. 2 I 2 II 2 III 2 IV 2 I 212 II 212 III Evaluation of economics conditions in Russia by consumers, Evaluation of actual changes Evaluation of changes yet to happen I qtr. 2 II qtr. 2 III qtr. 2 I qtr. 21 II qtr. 21 III qtr. 21 I qtr. 22 II qtr. 22 III qtr. 22 I qtr. 23 II qtr. 23 III qtr. 23 I qtr. 24 II qtr. 24 III qtr. 24 I qtr. 25 II qtr. 25 III qtr. 25 I qtr. 26 II qtr. 26 III qtr. 26 I qtr. 27 II qtr. 27 III qtr. 27 I qtr. 28 II qtr. 28 III qtr. 28 I qtr. 29 II qtr. 29 III qtr. 29 I qtr. 2 II qtr. 2 III qtr. 2 I 2 II 2 III 2 IV 2 I 212 II 212 III Index of consumer confidence is calculated as the arithmetic average of 5 individual indexes: expected and actual changes in individual financial conditions, expected and actual changes in economic conditions of Russia, favorability of conditions for major purchases. The balance of estimations represents the difference between the sum of definitely positive and more likely positive than not answers and the some of definitely negative and more likely negative than not answers. Neutral answers are disregarded. 15

16 Section II. Other events of the retail trade Activities of INFOLine IA specialists On November 212 there will take place Twelfth St. Petersburg Food Forum The Trade in The Big City, organized by Imperia CEC, at which Mikhail Burmistrov, the CEO of INFOLine-Analytics, will be one of the key speakers. The addresses at this forum will be also made by Mikhail Hazin (Neocon), Petr Ofitserov (Real Management), Sergey Lepkovich (X5 Retail Group), Vadim Korsunskiy (O Key), Grigoriy Trusov (Contact-Expert), Ilya Belonovskiy (ARTC) and many others. The forum will get together 45 delegates: food suppliers from all over the country and representatives of international, federal and regional retail chains. The forum s program will feature the only in St. Petersburg Chains Purchasing Center(tm), as well as, for the first time, the Integrated Program for Interaction with Chains of North-West. Mikhail Burmistrov will appear as the moderator of The Navigator for St. Petersburg Food Market: Let Us Plot a Course for 213 session. The Trade Register of St.Petersburg In October 212 the St. Petersburg administration and INFOLine IA concluded a contract for rendering services of data collection regarding the business entities engaged in trade activities at the territory of St. Petersburg for entering into the Trade Register. Articles 5 and 2 of the Federal Act of RF of 45 December 29 No.381- FZ On Principles of State Regulation of Trade in RF and article 3 of the St. Petersburg Act of 27 October 2 No On State Regulation of Trade in St. Petersburg provide for establishing of the Trade Register. The government body responsible for formation of the Trade Register of St. Petersburg is the Committee for economic development, industrial policy and trade. In accordance with the commission of the Committee of economic development, industrial policy and trade, in October 212 INFOLine IA commenced collection and organization of data on business entities, engaged in trade activity at the territory of St. Petersburg, which would be entered into the Trade Registry. The first stage of the project, in context of which it is planned to collect more than 3 applications from retail business entities for entering into the city s Trade Register, will be completed in November. In accordance with the Federal Act of RF of 28 December 29 No.381- FZ On Principles of State Regulation of Trade in RF, all business entities engaged in trade activities are placed under obligation to present data for entering into the Trade Registry. For this it is required to fill in a standard pattern application, which is the key element of the procedure of entering a business entity into the Trade Registry, and forward the original hard copy to the following address: INFOLine office, 28B, KIM prospect, , St. Petersburg, while an electronic copy should be ed to reestr@advis.ru. Upon the receipt of your application the specialists of INFOLine IA will contact your and confirm the receipt of the original hard copy INFOLine IA information phone: On 25 October 212 the Working Group for Support of the National Producer held a meeting. An expert of the Working Group, the CEO of INFOLine Ivan Fedyakov, proposed to carry out an audit of Trading Registers formation in the subjects of RF, to activate the Registers filling up of with data and to make Trade Registers publiclyaccessible. 16

17 Periodic review of industry "Rating retailers FMCG of Russia" October 212 Section III. Events and development plans of FMCG retail chains X5 Retail Group N.V. / Pyaterochka, Perekrestok, Karusel and Perekrestokexpress trading chain Company name: X5 Retail Group N.V. V. Address: 28, str.4, Srednyaya Kalitnikovskaya, Moscow, 929. Phones: Fax: , info@x5.ru Web: Chief executive: Stephan Ducharme, CEO ad interim. Chain development As of 1 October 212 X5 Retail Group manages 3472 stores, with trading floorspace of thousand square meters. The chain includes 2936 Pyaterochka soft discounters 22, Perekrestok-Express 1 convenience stores, 35 Perekrestok supermarkets, 76 Karusel hypermarkets. The number of franchisee stores in Russia came up to 44 outlets by 1 October 212. During 9 months of 212 X5 Retail Group increased its trading floorspace by thousand square meters, and the number of stores by 47, including 4 Pyaterochka soft discounters, 4 Perekrestok-Express convenience stores, 2 Perekrestok supermarkets and decreased it by one Karusel hypermarket (besides, all 6 Pyaterochka Maxi hypermarkets were rebranded into Karusel). As of 1 October 212 the stock capital of X5 Retail Group was distributed as follows: Alfa Group 47.86%, founders of Pyaterochka chain 19.85%, management of X5.13%, treasury stock.%, in free floating 32.5%. In September 212 it became known that X5 Retail Group and the Government of Tula region concluded an Agreement on cooperation, under which it was planned to implement an investment projects for development of trading infrastructure in this regional area. The Agreement was signed by the director for corporative relations of X5 Retail Group Mikhail Susov and the governor of Tula region Vladimir Gruzdev. The agreement provides for opening of minimum 45 stores at the territory of Tula region during and investment of up to one billion roubles. The performance results and expectations Net sales revenue of X5 Retail Group in the third quarter of 212 came up to billion roubles, increasing by.4% in roubles against billion roubles during the third quarter of 2. During the third quarter of 212 the like-for-like sales decreased by.7%, which was determined by lowering of buyers traffic by 2.5%, while the average receipt increased by 1.8%. The buyers traffic during the third quarter of 212 came up to 454 million people, and the average receipt came up to roubles. The net sales revenue of X5 Retail Group in the 9 months of 212 came up to billion roubles, increasing by 7.2% in roubles against billion roubles during the 9 months of 2. During the 9 months of 212 the like-for-like sales decreased by 1.9%, the buyers traffic decreased by 2.8%, meanwhile the average receipt increased by.9%. The buyers traffic during the 9 months of 212 came up to million people, and the average receipt to 35.1 roubles. In the company s report for 9 month of 212 it is noted that the growth of net retail sales revenue was mainly determined by the growth of sales revenue at discounters and, to a less extent, at supermarkets due to organic growth of new stores and positive operational results of stores opened during last two years, as well as systematic promo-actions. The overall growth of sales revenue was negatively influenced by decreasing net sales in hypermarkets. Resignations and appointments In October 212 it became known that the position of the CEO of А5 pharmacy chain was assigned to Andrey Gusev, ex-director of X5 Retail Group, who previously headed Rigla pharmacy chain and Clinic +31 medical center. The top manager took office 22 As it has come to be generally accepted by the international retailers the format of discounter should meet the one commodity - one demand rule. But it is important to emphasize that in Russia the discounter format, as such, is non-existent. At the same time the specialists of INFOLine IA would like to distinguish two subformats of the convenience store format: soft discounters, for the formats of the number of the largest Russian players, such as Pyaterochka, Diksi, Magnit, Monetka, Kopeika, Maria-Ra and others, and convenience stores. In this section we are using the term of a convenience store meaning a soft discount store. 17

18 on 8 October 212, thus replacing Sergey Solodov, which would continue his work as a member of the board of А5. According to Andrey Gusev, his priority task at the new position will be building of an efficient model of the pharmacology retail and business processes. Logistics In October 212 it became known that X5 Retail Group rented additional 2 blocks of the second stage of a class A storage complex located in Kstovskiy district of Nizhniy Novgorod region, with total floorspace of 16 thousand square meters. The first stage already accommodates a distribution center of the company with total floorspace of more than 16 thousand square meters. The company made a decision to combine all its stocks in Nizhniy Novgorod in the context of one project and concluded a rental contract for years. Х5 Retail Group plans to develop stage-by-stage in the new premises: the commencement of operations in the dry block is planned for December of 212, and in refrigeration block for February 213. Private label In October 212 it became known that X5 Retail Group applied to Rospatent for a registration of two children s clothes brands Golden Girl and Golden Boy. The company intends to manufacture the clothing in China and sell in its own hypermarkets. The product line includes various kinds of clothing, accessories and footwear. Mikhail Susov, corporative relations director of X5 Retail Group, explained that the company planned to produce and sell clothes for boys and girls. However, he said, these are rather remote plans. In half a year upon the registration of the trade marks the company will begin to develop a detailed strategy of shaping the collections and distribution. The children s clothes are to be sold at hypermarkets of X5 Retail Group. All the goods in this line will be positioned for the middle and low price brackets. Interaction with suppliers In October 212 it became known that X5 Retail Group, Auchan and other market players were considering the transition to new, long-term contracts with their partners: the contracts will be concluded for three-four years, not for a year or less, as it is practiced now. But for the producers the long-term contracts can result in impossibility to increase prices. This was announced by the director for corporative relations of the company, Mikhail Susov: It seems to me the market has matured for this. Ideally the long-term contracts will add more confidence to suppliers: they will not be afraid that in a half year or a year the chain will part company with them, and they will be able to plan the orders in advance. Retailers, in their turn, will get stable supply volumes, proved quality and fair prices, which will not be increased all of a sudden. Mariya Kurnosova, the external relations director of Auchan related that the company for a long time had announced to it suppliers readiness to change over to long-term contracts. Some time ago the retailer made such suggestion specifically to agricultural produce suppliers. As of October 212 X5 Retail Group and Auchan were concluding supply agreements for a year or less. Corporative events In October 212 X5 Retail Group announced an extraordinary general shareholders meeting (EGSM), which was to be held on 7 December 212 at : at 2, Parkstraat 2514 JK Hague, the Netherlands. The date of the registry closure is 9 November 212. The main question of the EGSM agenda is approval of changes to the Corporate Charter. In October 212 X5 Retail Group announced that its % subsidiary, IKS 5 FINANS LLC, successfully floated an issue of bonds of series BO-1 for the sum of 5 billion roubles. The oversubscription came up to more than 2%. The coupon rate of bonds with 3-year circulation period was established at the level of 9.5%. The company plans to use the bond emission attracted funds for refinancing of its short-term debts for improvement of X5 Retail Group credit portfolio structure. The floatation was organized by Alpha-Bank JSC, Raiffeizenbank CJSC, VTB Capital CJSC; co-organized by Globexbank CJSC and Ronin LLC acted as an underwriter. The bid book was opened on 28 September

19 Periodic review of industry "Rating retailers FMCG of Russia" October 212 Research (full version) consists description by largest FMCG chains in Russia: X5 Retail Group N.V. (Pyaterochka, Perekrestok, Karusel and Perekrestokexpress); Magnit, JSC (Magnit retail chain); Auchan Group (Auchan and Atac retail chains); Metro Group (Metro Cash&Carry and real- retail chains); O'Key, LTD. (O Key retail chain); Lenta, LTD. (Lenta Cash&Carry retail chain); DiksiGroup, JSC (Diksi trading chain, Megamart, Minimart, Viktoria-kvartal, Deshevo, Semeynaya Kopilka, Viktoria, Kesh); Sedmoi Kontinent, JSC (Sedmoi Kontinent, Nash) The description of each network includes news according to sections: Chain development (operation results, plans of further development); The performance results and expectations (key financial results and plans); Investment activities; Private label (key private label of the chain, their development and plans to the future expansion); Resignations and appointments; M&A deals; New formats (introduce and/or plans on introduce new formats to the market); Logistics (opening new distribution centers, the level of supply centralization, etc.); Commissioning of the stores (during last month); Closing the stores (during last month); Co-operation with consumers (actions, loyalty programs, etc.); Co-operation with suppliers (working conditions with suppliers, new partners, etc.); Corporative events (other news by the chain (judicial proceedings, labor relations, etc.). 19