1 A Service GLOBAL TRENDS & FORECASTS, 2013 Retail Horizons - Looking forward to 2020 December 2012 MATTHEW STYCH Research Director ROBERT GREGORY Global Research Director

2 1.Retail in Trends for 2020 i.Flexibility ii.Internationalisation of Emerging Market Retailers iii.Mycommerce iv.Market Polarisation v.Direct to Consumer vi.Nostalgia vii.Hyperlocal Marketing viii.Community Retailing ix.Digital Engagement x.Logistics as a Differentiator 3.Retail in 2020: Implications Contents

1. Retail in 2012

4 Shoppers are increasingly demanding more from retailers, who are having to face some uncomfortable questions. CONSUMER Increasingly fast- paced lifestyles Tech-savvy Ageing population Single households Uncertainty over economy MARKET Legislation Weak non- food sales Saturation Urbanisation Rising fuel prices Rise of e-commerce I want value I want that NOW I want convenience I trust customer reviews I want my voice to be heard Where does my food come from? Am I safe from Amazon? Is big-box dead? Does online need offline? Should I exit international markets to focus on core home market?

5  Carrefour planet was seen as the retailer’s attempts to reinvent the hypermarket format, which has been losing share in Western Europe.  However, new CEO George Plassat has halted the roll-out of planet beyond 2012 given that converted stores had not performed as well as expected.  Carrefour planet was too costly to roll out on a wide scale and also caused confusion among shoppers about price positioning.  Failure of Carrefour planet, the retailer’s first major (and costly) attempt to revitalise the hypermarket, has sparked genuine concerns over the viability of the format.  The need to invest back in the core French market has ultimately led to Carrefour exiting non-core markets such as in South-East Asia.  2012 also saw other retailers, such as Best Buy and Tesco, launch new strategies based on big-box slowdown. 1.Carrefour halts roll-out of Carrefour planet concept in Europe beyond Three events which impacted global retail in 2012: 1. Retail in 2012