29 June 2005GfK Group Czech Retail & Shopping Centre Development
1
INCOMA ResearchLATEST DEVELOPMENTS OF THE CZECH
RETAIL, EXPANSION OF SHOPPING CENTRES
Tomáš Drtina, INCOMA Research
29 June 2005GfK Group Czech Retail & Shopping Centre Development
2
INCOMA Research
INCOMA Research
established in February 1991; since May 2000 member of the international group of GfK
member of ESOMAR, SIMAR, EAERCD, ICSC
25 full-time employeees, who carry out about two hundred research and consultancy projects a year, most of them in the segment of retail & real estate research
combines local and international know-how
operates mainly in Czechia and Slovakia, but activities also in other countries of CEE region (in cooperation with the partner GfK companies)
INCOMA is market leader in the field of retail & real estate research and consultancy
can take benefit of own wide consumer, retail and real estate database
conducts regularly generic multi-client surveys, dealing mainly with retail, but also e.g. with leisure or residential market segments
can guarantee unbiased and objective expert view
has established long-term partner relationships with its clients (mainly retailers, developers, suppliers)
29 June 2005GfK Group Czech Retail & Shopping Centre Development
3
INCOMA Research
market concentration speed slowing down, TOP 10 retailers control 50% of the FMCG already
competition getting sharper, not all big retailers recorded a good year in 2004
hypermarket has become the most preferred retail format, however its growth has stopped recently
market more global, more international
discounters on their way up – they managed the highest growth in 2004, thanks to Lidl
even higher pressure on communication of low prices by most retailers
changes in shopping behaviour, shoppers becoming more demanding
growing differentiation among shoppers
MAIN TRENDS IN CZECH RETAIL
29 June 2005GfK Group Czech Retail & Shopping Centre Development
4
INCOMA Research
TOP50 CHAINS‘ RETAIL SALES STRUCTURE
44%
17%
15%
4%
8%
4%
2%
2%
4% hypermarkets
supermarkets
discounts
small food stores
do-it-yourself
consumer electronics
chemists
furniture
other
29 June 2005GfK Group Czech Retail & Shopping Centre Development
5
INCOMA Research
DEVELOPMENT OF NUMBER OF HYPERMARKETS IN THE CZECH REPUBLIC
27
25
51
82
106
127
145
160
0
20
40
60
80
100
120
140
160
180
1.1.1997
1.1.1998
1.1.1999
1.1.2000
1.1.2001
1.1.2002
1.1.2003
1.1.2004
1.1.2005
num
ber
of
sto
res
Source: Database INCOMA Research*(years 2003 - 2005 including Hypernova stores with less than 2500 m2 of SFS)
in 2004, 15 hypermarkets were opened, this year further 10-12 are planned (+ small Tesco)
29 June 2005GfK Group Czech Retail & Shopping Centre Development
6
INCOMA Research
DEVELOPMENT OF HYPERMARKET SELLING SPACE IN THE CZECH REPUBLIC
0 10 40
137
260
450
547
635
727
816
0
100
200
300
400
500
600
700
800
900
1.1.1996 1.1.1997 1.1.1998 1.1.1999 1.1.2000 1.1.2001 1.1.2002 1.1.2003 1.1.2004 1.1.2005
sellin
g s
pace
(th
s. m
2)
Source: Database INCOMA Research*(years 2003 - 2005 including Hypernova stores with less than 2500 m2 of SFS)
at the end of 2006, the level of 100 m2 per 1000 inh. can be achieved
29 June 2005GfK Group Czech Retail & Shopping Centre Development
7
INCOMA Research
TOP10 RETAILERS IN CZECHIA (revenues in CZK billion)
the fastest grow was by Lidl, further by Makro, Ahold, Tesco, Kaufland
Ranking Group / Company Chain (no. of stores)turnover
2003turnover
2004change
2004/20031. Makro Cash&Carry ČR Makro (11) 35.7 38.2 * 2.52. Ahold Czech Republic Albert (184), Hypernova (47) 32.5 * 34.6 * 2.13. Schwarz ČR 27.0 * 34.5 * 7.5
Kaufland Kaufland (57) 25.0 * 26.5 * 1.5Lidl ČR Lidl (96) 2.0 * 8.0 * 6.0
4. REWE ČR 22.3 * 23.3 * 1.0Billa Billa (71) 8.5 * 8.5 * 0.0Penny Market Penny Market (151) 13.8 14.8 1.0
5. Tesco Stores ČRTesco hypermarket (19), Tesco OD (6) 19.0 * 21.0 * 2.0
6. Globus ČRGlobus (10), Baumarkt Globus (2) 18.2 19.0 0.8
7. Tengelmann ČR 17.7 * 18.9 * 1.2Plus - Discount Plus (113) 12.1 13.0 * 0.9OBI - systémová centrála OBI (17) 5.6 * 5.9 * 0.3
8. DelvitaDelvita (76), Delvita City (3), Proxy (9), Sama (9) 10.0 * 10.0 * 0.0
9. Carrefour ČR Carrefour (10) 10.0 * 11.0 * 1.010. Spar ČR (Spar Česká obchodní, Spar Šumava) Interspar (17) 9.0 * 11.0 * 2.0
1.-10. TOTAL 203.4 * 221.5 * 20.1* = INCOMA Research estimateSource: INCOMA Research
29 June 2005GfK Group Czech Retail & Shopping Centre Development
8
INCOMA Research
PURCHASING POWER IN CEE STILL LOW
49 47 45 44 4236
30 29 27 26 24 26
91
76
5259
68
101
113
74
100
79
66
A EU-15
D SP CP GR SLO P CZ H SK EST LT PL HR LV RUS RO BG TR BA MAC UA
Germany = 100
29 June 2005GfK Group Czech Retail & Shopping Centre Development
9
INCOMA Research
HYPERMARKET SELLING SPACE IN CZECH DISTRICTS – PER CAPITA (1.1.2005)
29 June 2005GfK Group Czech Retail & Shopping Centre Development
10
INCOMA Research
WHAT IS IMPORTANT FOR YOU WHEN BUYING FOOD?
(average mark 1=very important, 5=totally unimportant)
85 8066 61 63 69
60 57 49 53 5739 40 37 32 24 22 29
17
12 1526 30 27 21
29 3036 32 24
27 2520
1923 23 14
14
01020304050
60708090
100
fres
hn
ess
and
qu
alit
y of
goo
ds
pri
ce le
vel
asso
rtm
ent
ran
ge
qu
ick
shop
pin
g
orie
nta
tion
in t
he
stor
e
visi
ble
pri
ce t
ags
clea
nes
s of
th
e st
ore
and
its
surr
oun
din
gs
nic
e an
d w
illin
g s
taff
shop
pin
g e
nvi
ron
men
t
tim
e ac
cess
ibili
ty o
f st
ore
open
ing
hou
rs
pre
sen
ce o
f C
zech
pro
du
cts
trad
itio
n, h
abit
cap
acit
y of
par
kin
g lo
t
acce
ssib
ility
by
pu
blic
tra
nsp
ort
pre
sen
ce o
f b
ran
ded
pro
du
cts
cust
omer
ser
vice
s
pos
sib
ility
of
cash
less
pay
men
t
loya
lty
sch
emes
in %
rather important
very important
1,191,27 1,44 1,50 1,48
1,681,59 1,691,71
2,542,10 2,16
2,712,652,77
3,232,99
1,42 1,54
29 June 2005GfK Group Czech Retail & Shopping Centre Development
11
INCOMA Research
IMPORTANCE OF PARTICULAR FACTORS FOR THE CHOICE OF SHOPPING PLACE - FASHION
1,4
5
1,5
4
1,5
7
2,0
7
2,1
6
2,2
4
2,2
7
2,3
1
2,4
2
2,4
7
2,8
1
2,8
3
2,9
9
3,0
1
3,1
3
1
1,5
2
2,5
3
3,5
ple
asa
nt &
qualified p
ers
onnel
quality
goods
wid
e c
hoic
e o
f goods
seaso
nal dis
counts
low
pri
ces
indiv
idual st
yle
trendy g
oods
more
sto
res
in o
ne p
lace
date
less
fash
ion
pro
xim
ity o
f th
e s
tore
furt
her
ass
ort
ments
in the s
tore
non-c
ash
paym
ent
bra
nded fash
ion
part
of a s
hoppin
g c
entr
e
larg
e s
izes
TOTALsmall customersmedium customersbig customers
average importance, where 1 - very important, 5 - unimportant factor
29 June 2005GfK Group Czech Retail & Shopping Centre Development
12
INCOMA Research
DO YOU USE A CAR FOR SHOPPING ?
(in % of respondents, by household monthly income and by size of place of residence)
32
1018
32 3039
43 4145
35
2230 28
28
7
22
27 35
3231
41 30
26
25
29 31
10 9
11
1311
5
4
11
12
10 10
8
7
5 67
66
22
74
40
2115
11 9 516
22 24 23
6
8
710
5
11
15
4
24
0%
20%
40%
60%
80%
100%
TO
TA
L
HO
USEH
OLD
INC
OM
E
up t
o 8
000 C
ZK
8001 -
15 0
00 C
ZK
15 0
01 -
20 0
00 C
ZK
20 0
01 -
25 0
00 C
ZK
25 0
01 -
30 0
00 C
ZK
30 0
01 -
40 0
00 C
ZK
40 0
01 C
ZK a
nd
more
SIZ
E O
F R
ESID
EN
CE
PLA
CE
up t
o 999 inhabitant
1000-4
999 inhab.
5000-1
9999 inhab.
20000-9
9999 inhab.
100000 inhab.
no answer
no, we have no car
no, I see no need
exceptionally
yes, sometimes, forbigger shopping
yes, very often
three fifths of households use a car for shopping
regularly (esp. the richer ones)
29 June 2005GfK Group Czech Retail & Shopping Centre Development
13
INCOMA Research
IN WHAT TYPE OF STORE DO YOU REALIZE MOST OF YOUR EXPENDITURES ON FOOD ?
1620
3037 35
2426
23
29
21
1920
9
13
15
1718
19 22
49
41
32
2322
1820
13 12 108
53
29
4
26
18
20
55
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
XI/ 97 XI/ 98 XI/ 99 XI/ 00 XI/ 01 XI/ 02 XI/ 03 XI/ 04
other
market, stall
specialised store
serviced foodstore
superette
discount store
supermarket
hypermarket
preferences for hypermarkets do not grow anymore
29 June 2005GfK Group Czech Retail & Shopping Centre Development
14
INCOMA Research
IN WHAT TYPE OF STORE DO YOU REALIZE MOST OF YOUR EXPENDITURES ON FOOD ?
THE MAIN SHOPPING PLACE FOR FOOD IN THE CEE COUNTRIES
3529
23
8 105
25
7
20
814
18
29
12
34
54
74
22
2027 56
2 2
20
35
9 2
92
35
26
43
9
6
8
2
2
25
13
2
14
6
24
28
2
11
32
2 4
19
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%Cze
chia
Hungary
Pola
nd
Rom
ania
Russ
ia /
Mosc
ow
Russ
ia /
St.
Pete
rsburg
Serb
ia a
nd M
onte
negro
Slo
vakia
Ukra
ine /
Kie
v
other
specialised food shops
counter food shop
superette
discount store
supermarket
hypermarket
29 June 2005GfK Group Czech Retail & Shopping Centre Development
15
INCOMA Research
EXAMPLE FORMAT PREFERENCES BY SHOPPER TYPES (FMCG):
CZECHIA
2%
8%
14%
18%
22%
16%
4%
8%
9%
25%
15%
15%
2%
6%
11%
10%
21%
13%
13%
13%
18%
12%
18%
16%
20%
8%
16%
9%
6%
9%
12%
21%
15%
13%
8%
13%
15%
11%
8%
4%
6%
33%
26%
10%
5%
12%
2% 11%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
counter shop
small self-service store
supermarket
discount
hypermarket
TOTAL
share of types in the customers of formats
economist
mobile pragmatic
demanding
generous
communicativehousekeeper
thrifty
comfortableopportunist
undemandingconservative
29 June 2005GfK Group Czech Retail & Shopping Centre Development
16
INCOMA Research
SHOPPING CENTRES - LATEST MARKET DEVELOPMENTS
Expansion (tens of pipeline projects)
Gastronomy & Leisure to be integrated in majority of the new projects – „RETAILTAINMENT“, multi-function complexes
Fierce competition (winners and losers)
Changes in ownership and management
Not just „out-of-town“
„Hypermarketmania“ still continuing, however bigger accent put on „quality“ issues recently
New Concepts (traditional, specialized, malls, retail parks, factory outlet..)
Big Big Big
29 June 2005GfK Group Czech Retail & Shopping Centre Development
17
INCOMA Research
SHOPPING AS A WAY OF SPENDING TIME
Source: SHOPPING MALL 2004 (INCOMA + GfK)
HOW MUCH TIME DO YOU USUALLY SPEND WHEN YOU LAST IN YOUR SHOPPING CENTER?
2% 5% 19%
52%
22%
5 hours and more
3-4 hours
2-3 hours
1-2 hours
less than one hour
29 June 2005GfK Group Czech Retail & Shopping Centre Development
18
INCOMA Research
Within the framework of census of 177 largest shopping centres in Czechia were indentified ca.:
3560 shops
409 gastronomy outlets
50 leisure facilities
299 service outlets
NOT JUST RETAIL…
29 June 2005GfK Group Czech Retail & Shopping Centre Development
19
INCOMA Research
ROLE OF A HYPERMARKET IN A SHOPPING CENTRE
WHY DO YOU VISIT "YOUR" SHOPPING CENTRE?
both reasons - about the same
37%
mostly because of shopping in shopping
mall stores12%
mostly because of shopping in hypermarket
51%
Half households visit their centre mainly
because of shopping in the hypermarket.
Shopping mall is the main visit target for approximately one eighth of shoppers.
Generally about one half of households visit shopping mall.
29 June 2005GfK Group Czech Retail & Shopping Centre Development
20
INCOMA Research
4.16. Assortment structure of shopping malls situated within the shopping centres - 1.1.2005
(excluding hypermarkets and do-it-yourself stores, in % of total selling space)
33,0
15,113,3
11,2
9,4
3,22,7
2,1
1,8
1,4
1,4
1,1
0,9
0,9
0,9
0,7
0,5
0,5 fashion, clothes
consumer electronics, PC
sports, toys
shoes, leather goods
furniture, indoor textile
jewellery, gifts
chemist's, cosmetics
books, music shop
food
pharmacy
flowers
tobacco, newspapers
pet shop
optitian's
household equipments
auto-moto
photo
other assortments
SHARE ON RETAIL SPACE IN SHOPPING CENTRES
29 June 2005GfK Group Czech Retail & Shopping Centre Development
21
INCOMA Research
FASHION SECTOR EXPANDING(total number of stores in Czech shopping centres by categories)
0
100
200
300
400
500
600
700
800
900
1 000
1.1.2005 1.1.2004
29 June 2005GfK Group Czech Retail & Shopping Centre Development
22
INCOMA Research
NEW/FUTURE SHOPPING CENTRE PROJECTS - BOOM CONTINUES
Carrefour Eden
Liberec
Novo Plaza
Vaňkovka
Carrefour Královo Pole
Galerie Butovice
Plaza Centrum Plzeň
IGY České Budějovice
Palladium
Centrum Chodov
Karlovy Vary
Arkády PankrácPrague Nord
Plaza Centrum Brno
29 June 2005GfK Group Czech Retail & Shopping Centre Development
23
INCOMA Research
Thank you for your attention! drtina@ incoma.cz www.incoma.cz