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Russian Retail Market: 

Russian Retail Market Russian consumer market in 2002 is estimated $270 bn $200 bn was expenditures on goods and the rest on services Russian food and beverage market is estimated at app. USD 90 bn (2002), or 45% of total retail expenditure In 2002, the Muscovites were spending 42% of their total retail expenditure on food and alcoholic beverages ($15 bn), or US $121 per capita per month. Open markets share dropped down to 25.2% of total turnover (26% in 2001). In the 1st Quarter 2003, the share of food and beverage categories declined by 1% (down to 41%), while non-food products' share increased up to 59%. Retail sales of food products increased by 6.6%, while non-food categories grew by 8.7%. Total spending on white & black goods (excl. computers and office equipment) in Moscow amounted to USD 1 bn in 2002, on clothes (incl. footwear, underwear and fabrics) app. USD 5-6 bn. The turnover of Moscow HoReCa market (including fast food and institutional catering) is estimated at app. USD $2 bn in 2002, and according to some estimates it is growing 25-30% per annum. It is expected that in 2005 this sector will exceed a USD $4 bn mark.

Russian Retail Universe: 

selling food products and mixed assortment (food and some household categories ) Russian Retail Universe

Russian Retail Universe: 

Total Number of retail outlets in Russian cities reached 145 000 Russian Retail Universe

Russian Retail Universe Structure: 

Number of small retailers continue to dominate Russian Retail Universe Structure

Russian Retail Universe: 

2 retail outlets per 1,000 inhabitants Russian Retail Universe

Russian Retail Universe Equipped with Scanners: 

Only modern types of outlets are equipped with scanners Russian Retail Universe Equipped with Scanners

Russian Retail Universe : 

Approximately ½ Supermarkets in Russia do not belong to chains Russian Retail Universe

Moscow Chains – Model for Development: 

Moscow Chains – Model for Development

Moscow Chains – Model for Development: 

Moscow Chains – Model for Development

Major Players Food and Mixed Assortment: 

Major Players Food and Mixed Assortment Food and mixed networks targeting Consumers in low-income brackets: Pyaterochka Kopeika Deshevo / Kvartal (MDM-Viktoria, Kaliningrad) Penny (REWE, Germany) Consumers in medium- and high-income brackets: Ramstore The Seventh Continent / Mosmart (Rosmart) Perekrestok Paterson Petrovsky (BIN) Metro Cash&Carry Real (Metro, Germany) Auchan SPAR International Marktkauf Norfa (Lithuania

Major Players Food and Mixed Assortment: 

Major Players Food and Mixed Assortment Food and mixed networks Network operators contemplating Russian market entry: Carrefour (France) Casino (France) Kesko (Finland) Marks&Spencer (Britain) Mercasa (Spain) System-U (France) Tesco (Britain) Vilniaus Prekyba (Lithuania) W al-Mart (USA)

Major non-food networks : 

Major non-food networks Major non-food networks DIY: (DIY market in Russia, according to UFG estimates, amounted to US $5 billion in 2002 (up from USD 4.2 billion in 2001) Starik Khottabych OBI (Germany) Leroy Merlin (France) Household equipment and electronics: The size of the Moscow household equipment and electronics market (net of computers and office hardware) in 2002 exceeded US $1 billion.) M. Video Eldorado MIR Drugstores: According to available estimates, the pharmaceuticals market volume in Russia, which amounted to US $4.6 billion in 2002, should swell to US $5.8 billion by 2005..) Drugstore 36.6 ICN Doktor Stoletiye (Metalloinvest) Rigla (Good Health) Chudo-Doktor Stary Lekar Others: Sportmaster Arbat-Prestige

Main drivers of market development: Macroeconomic Factors: 

Main drivers of market development: Macroeconomic Factors Development of all main macroeconomic parameters of the post-crisis period indicates a continuing improvement of general economic situation in Russia, which creates a solid background for further investment in retail trade sector.

Main drivers of market development: Macroeconomic Factors: 

Main drivers of market development: Macroeconomic Factors

Main drivers of market development: Macroeconomic Factors: 

Main drivers of market development: Macroeconomic Factors

Main drivers of market development: Social and life style factors: 

Main drivers of market development: Social and life style factors

Major Competition Factors: 

Major Competition Factors

Major Competition Factors: 

Retail Chains: What is essential for successful competition? Major Competition Factors

Slide20: 

The 2nd largest market research company in Russia and CIS Operates in Russia since 1992 Retail audit and consumer research National Panel includes over 19,000 retail outlets Regular retail audit in all CIS countries; national panels in Ukraine, Belarus, Kazakhstan, and Kyrgyzstan Regular census of retailers in 200 Russian cities and 70 key cities in CIS Database on more than 80 product categories

Slide21: 

Thank You Business Analytica Tel: (095) 137 3800 Fax: (095) 135 7858 e-mail: ba@businessanalytica.ru