Store Customisation By Miloš Ryba Senior Retail Analyst Planet Retail Ltd | September 2011 How to adjust your store to the consumers

2  We are: The leading Global Retail Analysis firm since  We analyse: 9,000 retail operations across 211 retail markets.  We serve:  14 of Top 20 Consumer Goods companies  15 of Top 20 Retailers  9 of Top 20 Retail Technology Vendors  We deliver: Critical insights that create competitive advantage. About Planet Retail

3 Contents 1.Schwarz Group 2.Delhaize Group - Cross learning 3.Carrefour - Interviewing 4.Tesco - Loyalty card data 5.Conclusions

4 1 Schwarz Group

5 Schwarz Group’s Lidl – tested a few new concepts.  New soft discount concepts tested in Germany, UK and the Czech Republic.  Sales area to 1,000 square metres; (1,300 sq m).  Move into convenience:  locations in city centres;  fresh bakery and instore oven;  butcher’s counter; and  expansion of fruit and veg.  Convenience concept from the UK failed. Schwarz Group 1

6 2 Delhaize Group - Cross learning

7 Delhaize Group is master in cross-learning between banners and country operations.  Red Market discount supermarket launched in 2009 in Belgium.  Leanings from Delhaize’s US operations:  Food Lion – lower gondola end  Hannaford – self check out  Bottom Dollar – limited non food  Bloom – self scanners  Rolled out in Belgium and expanded into Greece, Romania. Cross learning 2

8 Walmart UK using a matrix system.  Walmart is taking learning from its Latin American operations.  Asda supermarkets using its “8 box matrix system”.  Through interviewing Asda identified locations with higher consumer demand for non food products. Cross learning 2

9 3 Carrefour - Interviewing

10 Carrefour planet concept. Interviewing 3  Move from ‘everything under one roof’ to becoming the ‘specialist for everyone’.  However, Carrefour still offers a vast array of non-food items which can be ordered online.  Carrefour interviewed 50,000 households.

11 4 Tesco - Loyalty card data

12 Tesco the master in store tailoring in the UK  Tesco Clubcard, the most sophisticated loyalty scheme, allows Tesco to customise its store to local consumers.  Tailored hypermarkets located in ethnic neighbourhoods like Brixton in London.  Expansion of Polish food ranges in the UK to more than 250 product lines.  Store tailoring is still not common in Tesco’s CE operations, but it is a par to the strategy. Loyalty card data 4

13 Tesco’s store opening process in Central Europe  Tesco looking for a region, city, town:  Number of cars  Income  Unemployment  Affluence of the region Loyalty card data 4  Revenue estimation  Identification of a store format  Cost of development and equipment  ROCE, final decision

14 Walmart paid a high price for lack of information about its consumers  Walmart, EDLP retailer, does not operate any loyalty scheme.  Walmart delisted products in 2008 as part of its rationalisation initiative.  Walmart is adding back 9,000 SKUs – which is 11% of its assortment – that were originally removed.  Lack of granularity in shopper data makes it challenging to tailor merchandising to the local demographic. Loyalty card data 4

15 5 Conclusions

16 Cross learning among banners and countries can make your business more successful Data from loyalty cards is a critical source for a format expansion and store tailoring Tailored store openings take time of which could take advantage your competitor Conclusions 5

17 Miloš Ryba Senior Retail Analyst Planet Retail Ltd T: +44 (0) F: +44 (0) Contact milosCEEretail

United Kingdom: Greater London House Hampstead Road London NW1 7EJ United Kingdom T: +44 (0) F: +44 (0) United Kingdom: Greater London House Hampstead Road London NW1 7EJ United Kingdom T: +44 (0) F: +44 (0) Germany: Dreieichstrasse 59 D Frankfurt am Main Germany T: +49 (0) F: +49 (0) Germany: Dreieichstrasse 59 D Frankfurt am Main Germany T: +49 (0) F: +49 (0) Japan: c/o INSIGHT INC. Atami Plaza 1401 Kasuga-cho 16-45, Atami-shi Shizuoka Japan T: +81 (0) F: +81 (0) Japan: c/o INSIGHT INC. Atami Plaza 1401 Kasuga-cho 16-45, Atami-shi Shizuoka Japan T: +81 (0) F: +81 (0) China: Tongxing Road Qingdao China T: +86 (0) F: +86 (0) China: Tongxing Road Qingdao China T: +86 (0) F: +86 (0) USA: 1450 American Lane Suite 1400 Schaumburg IL USA Tel: + (1) Fax: + (1) USA: 1450 American Lane Suite 1400 Schaumburg IL USA Tel: + (1) Fax: + (1) twitter.com/PlanetRetail facebook.com/PlanetRetail tinyurl.com/PR-linkedin Researched and published by Planet Retail Limited Company No: (England & Wales) - Registered Office: 66 Wigmore Street, London W1U 2SB Terms of use and copyright conditions This document is copyrighted. All rights reserved and no part of this publication may be reproduced, stored in a retrieval system or transmitted in any form without the prior permission of the publishers. We have taken every precaution to ensure that details provided in this document are accurate. The publishers are not liable for any omissions, errors or incorrect insertions, nor for any interpretations made from the document.