COMMERCIAL AFFAIRS, ROYAL THAI EMBASSY PRAGUE, NOVEMBER 2014

CZECH MARKET

In the year 2014, hypermarkets have confirmed their dominant position in the Czech market. As many as 43 % Czech households spend the highest share of their food and drugstore expenditures in hypermarkets. Discount stores have maintained the second position – 25 % Czech households spend most money on food there. As for the popularity of , 17 % Czech households prefer them when buying food. Smaller shops have been preferred by 15% households.

People primarily choose hypermarkets due to the wide choice of goods. Discount stores generally attract consumer due to a combination of favourable prices and reasonable quality. Customers preferring supermarkets mostly decide on a basis of their easy availability and because of the pleasant and clean environment. Small shops are attractive for their customers for their easy accessibility, pleasant and helpful staff and also for easy orientation in the store.

Younger consumers (under 40) with higher education prefer shopping in hypermarkets and supermarkets. On the other hand, discount stores and small shops are popular with older customers and customers with lower education level.

1 COMMERCIAL AFFAIRS, ROYAL THAI EMBASSY PRAGUE, CZECH REPUBLIC NOVEMBER 2014

MAIN SHOPPING POINTS FOR FAST MOVING CONSUMER GOODS

PRIMARY SHOPPING POINTS FOR FMCG IN 2014

small store; 15%

hypermarket; 43% ; 17%

; 25%

Source: Incoma Research, October 2014

2 COMMERCIAL AFFAIRS, ROYAL THAI EMBASSY PRAGUE, CZECH REPUBLIC NOVEMBER 2014

TOP 10 OF THE CZECH RETAIL

In Czech retail, we can observe the growing concentration. Market share of TOP 9 chain stores (, , Ahold, Market, , Globus, , ) increased from 65 % in the year 2011 up to 70 % in the year 2014.

KAUFLAND (owned by Schwarz Group from ) remained the largest retail chain in 2014, followed by TESCO (U.K.) and AHOLD (the Netherlands). Tesco Stores ČR operate the largest scale of retail formats, from the large Tesco hypermarkets to the Tesco Express convenience stores. In terms of number of stores, PENNY MARKET is a leader with 350 discount stores, followed by AHOLD with 283 stores and LIDL (229 stores).

TOP CZECH RETAILERS/TRADERS (FMCG – FAST MOVING CONSUMER GOODS) RANKING COMPANY TURNOVER in 2013 CHAIN, NUMBER OF (in bil. CZK, STORES excl. V.A.T.)

1. KAUFLAND 51,30 117 KAUFLAND hypermarkets 2. TESCO 44,01 6 department stores, STORES 63 supermarkets, 53 Tesco Express stores, 86 hypermarkets 3. AHOLD CR 40,06 56 hypermarkets, 227 supermarkets 4. PENNY 29,86 350 discount stores MARKET 5. MAKRO CASH 29,39 13 wholesale stores, & CARRY CR 2 Drive In

6. LIDL CR 24,72 229 discount stores 7. GLOBUS CR 23,00 15 hypermarkets, 3 Globus - Baumarkt 8. BILLA 20,98 206 supermarkets, 5 stop & shop 9. GECO 17,31 252 newspapers and cigarettes stores 10. SPAR 13,25 35 INTERSPAR hypermarkets, 14 SPAR supermarkets

Source: Incoma Research, October 2014 3