1. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 1 INCOMA Research LATEST DEVELOPMENTS OF THE CZECH RETAIL, EXPANSION OF SHOPPING CENTRES Tomáš Drtina, INCOMA Research

2. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 2 INCOMA Research established in February 1991; since May 2000 member of the international group of GfK member of ESOMAR, SIMAR, EAERCD, ICSC 25 full-time employeees, who carry out about two hundred research and consultancy projects a year, most of them in the segment of retail & real estate research combines local and international know-how operates mainly in Czechia and Slovakia, but activities also in other countries of CEE region (in cooperation with the partner GfK companies) INCOMA is market leader in the field of retail & real estate research and consultancy can take benefit of own wide consumer, retail and real estate database conducts regularly generic multi-client surveys, dealing mainly with retail, but also e.g. with leisure or residential market segments can guarantee unbiased and objective expert view has established long-term partner relationships with its clients (mainly retailers, developers, suppliers)

3. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 3 INCOMA Research market concentration speed slowing down, TOP 10 retailers control 50% of the FMCG already competition getting sharper, not all big retailers recorded a good year in 2004 hypermarket has become the most preferred retail format, however its growth has stopped recently market more global, more international discounters on their way up – they managed the highest growth in 2004, thanks to Lidl even higher pressure on communication of low prices by most retailers changes in shopping behaviour, shoppers becoming more demanding growing differentiation among shoppers MAIN TRENDS IN CZECH RETAIL

4. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 4 INCOMA Research TOP50 CHAINS RETAIL SALES STRUCTURE

5. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 5 INCOMA Research DEVELOPMENT OF NUMBER OF HYPERMARKETS IN THE CZECH REPUBLIC in 2004, 15 hypermarkets were opened, this year further 10-12 are planned (+ small Tesco)

6. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 6 INCOMA Research DEVELOPMENT OF HYPERMARKET SELLING SPACE IN THE CZECH REPUBLIC at the end of 2006, the level of 100 m 2 per 1000 inh. can be achieved

7. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 7 INCOMA Research TOP10 RETAILERS IN CZECHIA (revenues in CZK billion) the fastest grow was by Lidl, further by Makro, Ahold, Tesco, Kaufland

8. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 8 INCOMA Research PURCHASING POWER IN CEE STILL LOW Germany = 100

9. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 9 INCOMA Research HYPERMARKET SELLING SPACE IN CZECH DISTRICTS – PER CAPITA (1.1.2005)

10. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 10 INCOMA Research WHAT IS IMPORTANT FOR YOU WHEN BUYING FOOD? (average mark 1=very important, 5=totally unimportant)

11. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 11 INCOMA Research IMPORTANCE OF PARTICULAR FACTORS FOR THE CHOICE OF SHOPPING PLACE - FASHION average importance, where 1 - very important, 5 - unimportant factor

12. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 12 INCOMA Research DO YOU USE A CAR FOR SHOPPING ? (in % of respondents, by household monthly income and by size of place of residence) three fifths of households use a car for shopping regularly (esp. the richer ones)

13. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 13 INCOMA Research IN WHAT TYPE OF STORE DO YOU REALIZE MOST OF YOUR EXPENDITURES ON FOOD ? preferences for hypermarkets do not grow anymore

14. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 14 INCOMA Research IN WHAT TYPE OF STORE DO YOU REALIZE MOST OF YOUR EXPENDITURES ON FOOD ?

15. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 15 INCOMA Research EXAMPLE FORMAT PREFERENCES BY SHOPPER TYPES (FMCG): CZECHIA

16. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 16 INCOMA Research SHOPPING CENTRES - LATEST MARKET DEVELOPMENTS Expansion (tens of pipeline projects) Gastronomy & Leisure to be integrated in majority of the new projects – RETAILTAINMENT, multi-function complexes Fierce competition (winners and losers) Changes in ownership and management Not just out-of-town Hypermarketmania still continuing, however bigger accent put on quality issues recently New Concepts (traditional, specialized, malls, retail parks, factory outlet..) Big Big Big

17. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 17 INCOMA Research SHOPPING AS A WAY OF SPENDING TIME Source: SHOPPING MALL 2004 (INCOMA + GfK)

18. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 18 INCOMA Research Within the framework of census of 177 largest shopping centres in Czechia were indentified ca.: 3560 shops 409 gastronomy outlets 50 leisure facilities 299 service outlets NOT JUST RETAIL…

19. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 19 INCOMA Research ROLE OF A HYPERMARKET IN A SHOPPING CENTRE Half households visit their centre mainly because of shopping in the hypermarket. Shopping mall is the main visit target for approximately one eighth of shoppers. Generally about one half of households visit shopping mall.

20. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 20 INCOMA Research SHARE ON RETAIL SPACE IN SHOPPING CENTRES

21. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 21 INCOMA Research FASHION SECTOR EXPANDING (total number of stores in Czech shopping centres by categories)

22. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 22 INCOMA Research NEW/FUTURE SHOPPING CENTRE PROJECTS - BOOM CONTINUES Carrefour Eden Liberec Novo Plaza Vaňkovka Carrefour Královo Pole Galerie Butovice Plaza Centrum Plzeň IGY České Budějovice Palladium Centrum Chodov Karlovy Vary Arkády Pankrác Prague Nord Plaza Centrum Brno

23. 29 June 2005GfK GroupCzech Retail & Shopping Centre Development 23 INCOMA Research Thank you for your attention! drtina@ incoma.cz www.incoma.cz