1. Planet Retail Ltd | August 2011 Is there a future for hypermarkets? By Magali Dubreil Retail Analyst Hypermarket & Superstore Trends Worldwide, 2011

2. 2 This report highlights key hypermarket & superstore trends worldwide. It looks at the current challenges and opportunities, at what suppliers can expect of hypermarket retailers, and how they could position themselves for growth. Is there a future for hypermarkets? Magali Dubreil Retail Analyst Magali.Dubreil@planetretail.net All images ©Planet Retail Ltd unless otherwise stated. Matthias Queck Research Director Matthias.Queck@planetretail.net Denise Klug Associate Retail Analyst Denise.Klug@planetretail.net

3. 3 Contents 1.Global Market Overview 2.The Status Report 3.Tackling Challenges and Opportunities, 2011 4.Regional Overview i.Western Europe ii.Central & Eastern Europe iii.North America iv.Latin America v.Asia & Oceania vi.Africa vii.Middle East 5.Key Findings & Implications Note: This report does not include a ranking for North America as hypermarkets in this region comprise a number of large supermarket concepts. They are hypermarkets due to their size, but sell 90% grocery.

4. 4 Hypermarkets are on the stony path from providing ‘everything for everyone’ to becoming the ‘specialist for everyone’. Is there a future for hypermarkets? – Key findings  Hypermarkets & superstores retain unique strengths, with promising growth potential especially in the larger Asian, Eastern European and Latin American economies.  However, there are first signs of saturation not only in developed, but also developing markets – including Central Europe and some megacities. Saturation leads to an uphill battle. Consolidation is inevitable.  The large footprint makes expansion more difficult than in other formats. Due to limited availability of appropriate sites in developed markets, increased growth can only come via mergers and acquisitions. This can include the ‘hostile takeover’ of a competitor’s site.  City centres are becoming increasingly attractive, also in developing markets, due to rising fuel prices and the continuing expansion of other formats.  These reasons, together with a trend towards smaller families, more single households, an ageing population and changing shopping habits necessitate the development of compact hypermarkets. This means a shift towards superstores with an increasing focus on food products.  The choice is an aggressive no-frills discount approach or a service and variety-led, event-like shopping experience.  The traditionally decisive price image can only be regained by strengthening core efficiency advantages.

5. 5 Structural as well as socio-demographic changes have weakened the popularity of the traditional hypermarket format.  Variety is a double-edged sword - only an advantage if it is well thought out, with a comprehensible, well-guided store layout. Standardisation, product information, focus on high- interest categories can be helpful, supported by customer-friendly technology such as express self-checkouts and store navigation apps.  Click & collect services are well suited to bridge the gap to online retailing.  Increasingly hybrid consumers expect tailor-made responses to their particular needs. Retailers should respond with tiered offers and services. Small niches could serve as magnets to shoppers who would otherwise go elsewhere.  Hypermarkets are the strongholds for the branded product. Close co-operation with the large multiples in category management, promotions and advertising relieves the retailers of organisational work while bringing additional revenues.  Becoming compact has led to superfluous sales area. This space can be utilised to install the most positive elements of competing channels, such as convenience stores, discounters and specialists, as well as event shopping.  Social networking, combined with new instore technology and loyalty schemes, opens up new ways to liaise with customers and encourage the weekly one-stop shop. Is there a future for hypermarkets? – Key findings