COMPETITIVE ANALYSIS – DEMO REPORT

LARGE RETAILERS IN

AUCHAN

1.1

1. General data Company name: Auchan Romania SA Address (headquarters): Str. Barbu Delavrancea 13, Phone: +4021 4080107 Fax: +4021 2232024 Web: www.auchan.ro E-mail: [email protected] Year of establishment: 2005 Ownership: Auchan Group

2. Financial data Year/Category Net turnover Average no of Net profit (mil. EUR) employees (mil. EUR) 2010 355.8 3,184 -4.6 2009 307.6 3,103 -9.7 2008 278.4 3,156 -6.7 A FRD Center Market Entry Services Demo Publication www.market-entry.ro

3. Key persons Name Position Contact details Mr. Patrick Espasa General Director Email: [email protected] Mr. Tiberiu Danetiu Marketing Director Email: [email protected] Ms. Mariana Dragan Communication Manager Email: [email protected] Tel: +4 021 4080294

4. Brief profile Auchan Romania is part of the French Group Auchan.

Auchan opened its first on the Romanian market in 2006. This store is located in Bucharest (in the Titan area) and has the surface of over 16,000 sqm. The store records a daily traffic of 30,000 – 45,000 persons and registers the biggest sales in the Auchan network in Romania.

At present, Auchan has nine in Romania, located in Bucharest (two stores – in the Titan and Militari areas), Pitesti, Targu Mures, Cluj Napoca, Suceava, Timisoara, Constanta and Craiova.

The Auchan hypermarket in Cluj Napoca was opened in November 2007, with an investment of 40 million EUR. The store is located in the Iulius Mall, has the surface of some 10,000 sqm and offers over 45,000 products.

The Auchan hypermarket in Bucharest, located in the Militari area, was launched in December 2008, following an investment of 20 million EUR. The store has the surface of 12,500 sqm.

The Auchan store in Constanta was launched in October 2011, in the Maritimo Commercial Center. The store has a selling surface of 12,000 sqm and sells over 50,000 products.

Auchan intends to expand its network of units in Romania and to reach 14 hypermarkets by 2014. Auchan targets Braila, Galati, Brasov or Bucharest for the expansion process.

A FRD Center Market Entry Services Demo Publication www.market-entry.ro Examples of prices in Auchan hypermarkets (RON):

Product & brand September 2011 October 2011 November 2011 Dobrogea superior wheat 3.20 3.18 3.18 flour, category 000, 1 kg Zuzu milk, 1.5% fat, 3.70 3.79 3.79 cardboard box, 1 l Bunica oil, Pet, 1 l 7.32 7.07 7.07 Coca – Cola, Pet, 2 l 4.55 4.59 4.59 Timisoreana beer, dose, 1.98 2.09 1.99 500 ml Danone Nutriday Natural 0.91 0.98 0.96 Yogurt, 4.1% fat, 140 g Protex Fresh soap, 100 g 2.50 2.50 2.62 Dero Ozon+ automatic 3.38 3.46 3.19 laundry detergent, 400 g Lenor Spring 8.28 8.36 8.61 concentrated fabric softener, 1 l Mr. Proper universal 7.85 8.39 8.83 cleaning detergent, 1 l

A FRD Center Market Entry Services Demo Publication www.market-entry.ro 1.2 Cora

1. General data Company name: Romania Hypermarche SA Address (headquarters): Str. Lipscani 102, Bucharest Phone: +4021 3000770 Fax: +4021 3055830 Web: www.cora.ro E-mail: [email protected] Year of establishment: 2002 Ownership: Louis

2. Financial data Year/Category Net turnover Average no of Net profit (mil. EUR) employees (mil. EUR) 2010 327.0 3,146 15.7 2009 329.1 2,660 20.0 2008 399.0 2,883 19.7

3. Key persons Name Position Contact details Mr. Philippe Lejeune General Director Email: [email protected] Ms. Aura Radulescu Procurement Director Food Email: [email protected] Ms. Ana Maria Florea PR Responsible Email: [email protected] Phone: +40745 664250

4. Brief profile Romania Hypermarche, the operator of the Cora network in Romania, is part of the .

The first Cora hypermarket on the domestic market was launched in October 2003 in Bucharest (Pantelimon area). This is the biggest hypermarket in Romania. The store has 840 employees and a selling surface of 16,400 sqm. The Cora Pantelimon hypermarket sells annually 500,000 packages of toilet paper, 3.2 million bottles of water, 2.2 million beer doses and bottles, 2.1 million packets of biscuits, 1.3 million bags of sugar, 1.4 million oil bottles, 2.8 million yogurts, 1.5 million litres of milk, 400,000 kg of tomatoes, 500,000 kg of potatoes, 900,000 kg of citrus, 1.2 million kg of poultry, 850,000 kg of pork meat etc. A FRD Center Market Entry Services Demo Publication www.market-entry.ro

At present, the Cora network in Romania includes eight hypermarkets, located in Bucharest (three units – in Pantelimon area, Lujerului area and Sun Plaza Berceni), Cluj Napoca, , Constanta, Drobeta Turnu Severin and Arad. The biggest sales are recorded by the following stores: Cora Lujerului, Cora Pantelimon, Cora Sun Plaza – all in Bucharest - and Cora Cluj Napoca.

The Cora store in Drobeta Turnu Severin was opened in March 2011. The total investment in this unit amounts to some 22 million EUR.

The Cora store in Baia Mare was opened in November 2010, following investments of some four million EUR. The store is located within the Gold Plaza Mall and has a selling surface of 4,500 sqm. This was the first Cora store opened in smaller cities, with population lower than 100,000 inhabitants .

The Cora hypermarket located in the Sun Plaza in Bucharest was launched in February 2010. The store has a selling surface of 13,000 sqm and sells over 80,000 products. For this store, the retailer hired some 700 persons.

In 2012 Cora will open three units, located in Bucharest (in Park Lake Plaza Titan), Slobozia and Bacau. Also, the retailer owns lands in Brasov, Constanta and Galati. In Brasov, the retailer intends to open a Cora store and a commercial gallery with the surface of 5,000 sqm. In Constanta, the retailer will open the Corall commercial center.

In 2011, Cora received from the EBRD a credit of 210 million EUR in order to finance the expansion process on the domestic market.

Cora estimates a turnover of 330 - 335 million EUR for 2011 in Romania.

The private brands have a contribution of 12 - 14% in the Cora network’s turnover in Romania and their percentage will continue to grow. The retailer’s private brands are: - Cora (foods, detergents, cosmetics, sport, DIY etc) - Winny (foods) - Traditia Gustului (foods) - Nature Bio (organic products) - Prieten Vechi (wine) - L'ame du terroir (wine) - Prima (alcoholic drinks) - Gourmand (French traditional products)

A FRD Center Market Entry Services Demo Publication www.market-entry.ro Examples of prices in Cora hypermarkets (RON):

Product & brand September 2011 October 2011 November 2011 Margaritar sugar, paper 4.69 4.60 4.56 bag, 1 kg Zuzu milk, 1.5% fat, 3.70 3.69 3.99 cardboard box, 1 l Borsec carbonated 2.05 2.04 2.03 mineral water, Pet, 1.5 l Timisoreana beer, dose, 1.99 2.01 2.01 500 ml Jacobs Kronung Premium 11.99 11.96 11.99 Alintaroma coffee, 250 g Milka Lapte din Alpi 3.64 3.73 3.74 chocolate tablets, 100 g Danone Nutriday Natural 0.99 0.99 0.95 Yogurt, 4.1% fat, 140 g Colgate Advanced 7.59 7.15 7.03 Whitening, toothpaste 150 g / 100 ml Protex Fresh soap, 100 g 2.79 2.49 2.49 STR8 Original aerosol 11.26 11.19 11.76 deodorant, 150 ml

A FRD Center Market Entry Services Demo Publication www.market-entry.ro 1.3 Carrefour

1. General data Company name: Carrefour Romania SA Address (headquarters): Bd. Timisoara 26Z, Bucharest Phone: +4021 2067400 Fax: +4021 2067451 Web: www.carrefour.ro E-mail: [email protected] Year of establishment: 1999 Ownership: Carrefour Group

2. Financial data Year/Category Net turnover Average no of Net profit (mil. EUR) employees (mil. EUR) 2010 930.9 7,123 33.4 2009 1,027.2 7,738 20.8 2008 1,032.0 7,760 20.1

3. Key persons Name Position Contact details Mr. Francois Melchior General Manager Email: De Polignac [email protected] Mr. Vlad Ardeleanu Commercial Director Email: [email protected] Ms. Andreea Mihai Marketing Director Email: [email protected] Phone: +4021 8059421 Ms. Alina Horgea - Fresh Products Acquisition Email: [email protected] Manager

4. Brief profile Carrefour Romania is part of the French Group Carrefour. Carrefour is present both on hypermarket and segments in Romania.

The first Carrefour hypermarket on the domestic market was launched in 2001, in the Militari area in Bucharest, this representing the first hypermarket on the domestic market. The impact of the new format brought by Carrefour in Romania was seen immediately A FRD Center Market Entry Services Demo Publication www.market-entry.ro in the sales - in the first six months from its launching in 2001, the sales of the Carrefour Militari store exceeded 45 million EUR, a record amount for that period in Romania. The store’s turnover in 2002 recorded over 80 million EUR and the French Group decided to expand on the domestic market.

The second store launched by Carrefour in Romania - Carrefour Orhideea in Bucharest - represented another premiere for the local market: a hypermarket located near the city centre. This launching was followed by an expansion process that included one - two new hypermarkets per year. In 2008, Carrefour opened ten stores, with investments estimated at over 300 million EUR, reaching 21 hypermarkets in Romania.

Starting with 2009, Carrefour focused more on the , the retailer entering this market segment through the acquisition of the Artima network.

At present, Carrefour has 25 hypermarkets in Romania, out of which two were launched in 2011.

The Carrefour hypermarket in Botosani was launched in November 2011 in the Botosani Shopping Center. The store has a surface of 7,000 sqm.

In October 2011, Carrefour opened a hypermarket with the surface of 8,400 sqm, in the Colosseum Center in Bucharest. The store has 350 employees.

Apart from its hypermarkets, Carrefour has recently opened a series of proximity supermarkets named “”. This retail format sells a range of some 6,300 products and the offer includes over 1,000 products from the Carrefour own brand.

Carrefour recorded sales of 1.184 billion EUR in Romania in 2011.

Examples of prices in Carrefour hypermarkets (RON):

Product & brand September 2011 October 2011 November 2011 Dobrogea superior wheat 3.42 2.99 2.94 flour, category 000, 1 kg Zuzu milk, 1.5% fat, 3.68 3.68 3.68 cardboard box, 1 l Bunica oil, Pet, 1 l 6.89 7.08 7.07 Coca – Cola, Pet, 2 l 4.52 4.52 4.51 Borsec carbonated 2.03 2.03 2.03 A FRD Center Market Entry Services Demo Publication www.market-entry.ro mineral water, Pet, 1.5 l Timisoreana beer, dose, 1.99 1.99 1.99 500 ml Danone Nutriday Natural 0.98 0.98 0.95 Yogurt, 4.1% fat, 140 g Protex Fresh soap, 100 g 2.54 2.49 2.48 Lenor Spring 8.07 9.35 9.61 concentrated fabric softener, 1 l Mr. Proper universal 7.75 7.75 8.40 cleaning detergent, 1 l

A FRD Center Market Entry Services Demo Publication www.market-entry.ro 1.4 Competitive analysis

Net turnover dynamics

1,200

1,000

800

600 million EUR million 400

200

0 2008 2009 2010

Auchan Romania Romania Hypermarche Carrefour Romania

Source: Ministry of Public Finances

Net profit / loss dynamics

40

30

20

10 million EUR million 0

-10

-20 2008 2009 2010

Auchan Romania Romania Hypermarche Carrefour Romania

Source: Ministry of Public Finances A FRD Center Market Entry Services Demo Publication www.market-entry.ro

Average no of employees - dynamics

10,000

8,000

6,000

4,000

2,000

0 2008 2009 2010

Auchan Romania Romania Hypermarche Carrefour Romania

Source: Ministry of Public Finances

No of hypermarkets - dynamics

30

25 25 23 22

20

15

9 10 8 6 6 5 4 4

0 2009 2010 2011

Auchan Cora Carrefour Source: business publications

A FRD Center Market Entry Services Demo Publication www.market-entry.ro

Price comparison in November 2011 - food products

4.1

3.9

3.7

3.5

RON 3.3

3.1

2.9

2.7 Cora Lujerului Carrefour Orhideea Auchan Militari

Dobrogea superior wheat flour, category 000, 1 kg Zuzu milk, 1.5% fat, cardboard box, 1 l

Source: FRD Center

Price comparison in November 2011 - non food products

13.5

12.5

11.5

10.5

9.5

8.5

7.5

6.5 Cora Lujerului Carrefour Orhideea Auchan Militari

Colgate Advanced Whitening, 150 g / 100 ml Head&Shoulders Natural Menthol Shampoo, 200 ml Lenor Spring concentrated fabric softener, 1 l

Source: FRD Center A FRD Center Market Entry Services Demo Publication www.market-entry.ro This demo Competitor Analysis is produced by FRD Center Market Entry Services – www.frdcenter.ro - a privately owned market entry consulting firm based in Romania.

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