Food. Retail. Channels. in Russia
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1 Food Retail Channels in Russia St.-Petersburg 2011
2 Main food retail channels in Russia Supermarket chains Unstructured retail (individual entrepreneur, one-stop shops, 24/7 small supermarkets, trade pavillions) Marketplaces
3 Structure of goods turnover in Russia 41,2% of international retail chains present In Russia. At the same time, Moscow is the 7 th city according to number of international chains presenting: 39,9% international retailers work here. In the top list of the most attractive European cities Moscow is in Top-5, on the 4 th place. (39,9%). Number 1 here is London (56%), Number 2 is Paris (43,6%) and number 3 is Madrid (41,6%). Saint-Petersburg is today on the 58 th place (25,8%), having lost 2 positions since In top list of international retailers presence there are also Nizhniy Novgorod (#140, 13,1%), Yekaterinburg (#146, 13,1%) and Samara (#162, 11,1%). International retailers sales exposure to Russian market is 37% (according to UBS bank estimation) Other distribution channels cover only insignificant part of market. One of the reasons of such concentration of sales in larger channels is high concentration of population, especially in urban areas..
4 Structure of retail goods turnover formation in according to the type of organization
5 Supermarket chains in Russia Hypermarkets ( Auchan, Karusel, Lenta, Metro, О Key etc) Total number of Top-90 retailer hypermarkets by July, 1 st (2958, 2 thousand square meters) Supermarkets (Perekryostok, Prizma, LAND, Azbuka Vkusa, Globus Gourmet, Alye Parusa, etc) Total number of Top-90 retailer supermarkets by July, 1 st 2011 about 1647 (1467,4 thousand square meters) Discounters ( Pyatyorochka, Magnit, Dixi etc) Total number of Top-90 retailer discounters by July, 1 st about 9384 (3300,9 thousand square meters) Neighborhood stores (Perekryostok, Vester, lockal chains) Total number of Top-90 retailer neighborhood stores by July, 1 st about 1776 (563,2 thousand square meters)
6 Regional structure of retail goods turnover
7 Goods of premium level Suppliers and producers orientation towards medium and lower level goods caused by crisis of 2008 became a reason for lack of premium level goods made in Russia. As a result we have persistent demand for foreign high-quality goods 2011 increase in premium group for 38% Maximum increase in confectionery product family
8 Distribution in Russia WAREHOUSE PRODUCER Import SUPERMARKET-1 SUPERMARKET-2 + SUPERMARKET PR and marketing
9 Trade House LAND Consignment warehouses in Palermo(1), Milano (2) and Kouvola (Finland) (3) 3 Import to Russia by sea or by land 2 Upon request of our Customers we may deliver goods right to their warehouse. 1 Shipment from warehouses in Saint-Peterburg(1), Moscow(2) and Ekaterinburg(3) In other cities of LAND s presence (Voronezh, Rostov-on- Don, Volgograd, Samara, Kazan, Krasnoyarsk) we have special representatives.
10 Marketing events We provide our own marketing! Promotion activities Front layout Extra layout Printed production
11 Russian supermarket chains requirements for suppliers Most important criteria for signing a contract
12 Features of working with supermarket chains Entry ticket Fine sanctions for under delivery ( from 5 to 30% from the price of under delivery) Fine sanctions for improperly fulfilled goods supporting documents (bar code, label, ingredients, etc) (from 3% to 10% of goods price) Expiry period for goods when delivered to the supermarket no less than 70% Retro-bonus about 10% from the amount of delivered goods Marketing budget
13 Entry ticket «Neighborhood store» 10 euro 25 euro/ article/shop Discounter 10 euro-40euro/ article/shop Supermarket 40 euro-70 euro/ article /shop Hypermarket from 100 euro/ article/shop
14 Marketing budget In most cases an annual marketing program is being signed between a supplier and a chain Essential conditions: Participation in supermarket chains catalogue several times a year (depending on product matrix) Providing of degustation (average costs per 1 degustation in 1 supermarket for 4 days is 500 euro) Optional events: Translation of AD movie in supermarkets SALE (low price) for a certain period of time (a week, e.g.) Branded equipment of the company
15 How to enter Russian market: Trade House LAND recommendations Estimation of own capabilities and deciding about degree of penetration into Russian market (geography, channels of sales, promotion dynamics) Signing a contract with an experienced importer providing not only logistics, but product launch as well Elaboration (together with importer) of strategy of goods production Test sales(3 month) Signing of sales plan and marketing budget with importer on the basis of test sales. Observance of all signed engagements
16 Thank you for your attention! Trade House LAND Robespjera emb., 4 Saint-Petersburg, Russia Tel./Fax: (812)
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