Copyright 2004 ACNielsen ShopperTrends 1 March 2004 ShopperTrends 2004 Romania

Copyright 2004 ACNielsen ShopperTrends 2 Research Objectives

Copyright 2004 ACNielsen ShopperTrends 3 Research Objectives To provide retailers and manufacturers with a comprehensive overview of the Romanian retail environment ­ Understand the Romanian consumer: what they buy, when they shop, where they shop – and why ­ Identify the key factors driving shopper satisfaction and loyalty ­ What differentiates one retailer from another? ­ Store Equity: how strong is it, and what factors are driving it? ­ How do shoppers rate retailers on key drivers of satisfaction and loyalty?

Copyright 2004 ACNielsen ShopperTrends 4 Research Design

Copyright 2004 ACNielsen ShopperTrends 5 ­ Coverage of the capital Bucharest, Romania ­ Face-to-face, in-home interviews using random household selection ­ Sample size n=500, with the following split: n= 342 Main household buyers n= 158 Key Influencers ­ Booster sample of n=60 to ensure minimum bases of n=100 for specific retailers ­ Fieldwork: Nov-Dec 2003 ­ Utilised ACNielsen Winning Brands brand equity model Research Methodology

Copyright 2004 ACNielsen ShopperTrends 6 Economic Status & Outlook

Copyright 2004 ACNielsen ShopperTrends 7 Last 10 years have been a roller-coaster ride, but economy is now in better shape than ever. Growth is strong and possibly sustainable. Excellent results from food and beverage, FMCGs, consumer durables and IT. 80% of multi-national corporation country managers are cautiously optimistic, double the level of two years ago. Romania is taking one of the priority seats for business development for most clients (as growth slowed in the core CEE countries). Purchasing power is still low – average take-home pay is €100. But domestic demand boosted by FDI. Business performance Source: EIU

Copyright 2004 ACNielsen ShopperTrends 8 Continued pressure on profit margins. Companies now upgrading presence: spending more on advertising and brand-building, expanding out of Bucharest, expanding distribution. Competition will tighten in the next two years as more companies continue to invest in business development in Romania and as hypermarkets/supermarkets continue their expansion. Most major players will be on the market within a year. Business outlook Source: EIU

Copyright 2004 ACNielsen ShopperTrends 9 Grocery Market Performance

Copyright 2004 ACNielsen ShopperTrends 10 High number of small stores reflective of fragmented structure Bucharest driving modern trade Retail Structure Share by Channel Type 2003 (Food&Mixed excl. Kiosks) Source: ACNielsen

Copyright 2004 ACNielsen ShopperTrends 11 Supermarkets – weak in numbers, strong in sales Bucharest Retail Structure 2003 (Food&Mixed stores) Source: ACNielsen

Copyright 2004 ACNielsen ShopperTrends 12 With economy stronger, retailers such as Tesco, Auchan and Schwarz may extend further East beyond CEE 2003

Copyright 2004 ACNielsen ShopperTrends 13 Source: ACNielsen Europe: Polarization – Discounters & Hypermarkets were big share gainers in last decade Share by Channel Type - Europe

Copyright 2004 ACNielsen ShopperTrends 14 Europe: Discounters show steady growth in number of stores Hard Discounters accounted for 52% in 2003 No. of Discounter Stores in Europe Source: ACNielsen {32.650} 52% 48% Lidl now in 14 European countries

Copyright 2004 ACNielsen ShopperTrends 15 ACNielsen I ShopperTrends DETAILED FINDINGS

Copyright 2004 ACNielsen ShopperTrends 16 Shopper Profile Shopper Profile

Copyright 2004 ACNielsen ShopperTrends 17 Shopper Profile by Type & Gender & Age Base: All respondents (n=500) GENDER AGE - Main shopping is strongly dominated by females - Males play quite an important role in influencing the shopping - Teenagers and Young Adults (15-24) constitute a significant force among the key influencers

Copyright 2004 ACNielsen ShopperTrends 18 Base: All respondents (n=500) Shopper Profile by Trade Channel Type - A good majority of shoppers shop at both modern and traditional trade stores without being loyal to a trade channel type. - Modern trade stores have a stronger foothold among shoppers loyal to a particular store type than traditional stores. Definitions :  Modern shopper: Have shopped only at Modern trade stores in past 4 weeks; OR spend most at a Modern Trade store (i.e. 50% or more of their grocery budget)  Traditional shopper: Have shopped only at Traditional trade stores in past 4 weeks; OR spend most at a Traditional trade store (i.e. 50% or more of their grocery budget)  Mixed shopper: Have shopped at both Modern and Traditional trade stores in past 4 weeks, and spend less than 50% of grocery budget at most often shopped store

Copyright 2004 ACNielsen ShopperTrends 19 Trade Sector Overview Trade Sector Overview

Copyright 2004 ACNielsen ShopperTrends 20 Trade Sector Classification Kiosks Hypermarket Carrefour Cora Billa La Fourmi Mega Image Gima Metro Selgros Supermarket Veggie Vendor/ Fruit & Veggie Shop Open Markets Convenience stores Cash & Carry Traditional grocery stores Modern Trade Traditional Trade XXL Discounter Minimarket

Copyright 2004 ACNielsen ShopperTrends 21 Trade Sector Relationships Trade Sector Relationships Modern Trade & Traditional Trade

Copyright 2004 ACNielsen ShopperTrends 22 Trade Sector Relationships – Modern Trade - Shoppers spend significantly more in supermarkets compared to other modern trade outlets. HYPERMARKETS SUPERMARKETS MINIMARKETS Base: All respondents (n=500) Spend Most Money (%) Use Regularly (P7D) (%) Use P4W (%) Occasionally Use (%) Ever Used Past Year (%) Consider Using (%) Non considerers (%) Base: All respondents using less often than occasionally CASH & CARRY DISCOUNTERS Number of stores

Copyright 2004 ACNielsen ShopperTrends 23 Trade Sector Relationships – Traditional Trade - Traditional trade channels have considerably higher percentage of regular and occasional visits than the Modern Trade, stemming from top-up shopping rather than main shopping, as well as purchase of Fresh Produce in the case of Open Markets and Bakeries KIOSKS TRADITIONAL GROCERIES OPEN MARKETS BAKERIES Base: All respondents (n=500) Spend Most Money (%) Use Regularly (P7D) (%) Use P4W (%) Occasionally Use (%) Ever Used Past Year (%) Consider Using (%) Non considerers (%) Base: All respondents using less often than occasionally

Copyright 2004 ACNielsen ShopperTrends 24 Base: All Supermarket / Hypermarket shoppers (n=358) 1 Shop 2 Shops 3 Shops 4 Shops 5 Shops 6 Shops 7 Shops 8 Shops Average 3.11 Number of Different Supermarket/Hypermarket Stores Used Past 4 Weeks - Competition is fierce, with shoppers having visited an average of 3 different stores the past 4 weeks.

Copyright 2004 ACNielsen ShopperTrends 25 Key Product Category Purchases

Copyright 2004 ACNielsen ShopperTrends 26 Fresh Fruit & Vegetables* Fresh Meat/Chicken** Fresh Fish/Seafood*** Main Regular Source of Purchase for Fresh Food Items – Most Often Vs. Regular Modern trade stores have strong competition from other trade types for Fresh Produce. Open Markets remain to dominate the purchasing of fresh fruits & vegetables. * 1% do not buy Fruit & Vegetables ** 2% do not buy Meat or Chicken *** 13% do not buy Fresh Fish/Seafood

Copyright 2004 ACNielsen ShopperTrends 27 Canned & packaged Frozen & Chilled Snacks & Food* Food** Confectionery*** Main Regular Source of Purchase for Packaged Food – Most Often Vs. Regular Modern trade stores have strong competition from Kiosks and Confectioneries for Snacks and Confectioneries, while shoppers prefer hypers/supermarkets for packaged foods. * 17% do not buy canned & packed food ** 20% do not buy frozen & chilled food *** 6% do not buy snacks & confectionery

Copyright 2004 ACNielsen ShopperTrends 28 Winning B®ands™ Equity Model What is Store Equity Index Store Relationship with Customers Store Equity Indices for Hypermarkets/ supermarkets

Copyright 2004 ACNielsen ShopperTrends 29 What is Store Equity Index

Copyright 2004 ACNielsen ShopperTrends 30 How is it measured? By measuring the outcomes of Brand Equity Factor Analysis Brand Equity Index (BEI) 3. Willing to pay price premium? 1. % Favorite brand 2. % Recommend the brand Brand (Store) Equity Index

Copyright 2004 ACNielsen ShopperTrends 31 Factor Analysis Brand Equity Index (BEI) ASSOCIATIONS AWARENESS CONSIDERATION Brand (Store) Equity Index How can it be managed? By managing the sources of Brand Equity

Copyright 2004 ACNielsen ShopperTrends 32 The Winning Brands Model identifies the Key Drivers of Store Brand Equity What people do with stores What people know about stores Price Premium Store Loyalty Store Equity Index Store Equity Index Awareness Consideration Association A Association B Association C

Copyright 2004 ACNielsen ShopperTrends 33 Building strong brand equity requires consistent brand strategy and investment Strong brand equity is the exception; ­ only about 15% of brands command a brand equity score of more than 3.0 ­ more than 30% are in the range Majority of brands have an equity score of less than 1.0 Source : ACNielsen|Winning Brands normative database of more than 1,500 brands Strong brands Brand Equity Index Norm

Copyright 2004 ACNielsen ShopperTrends 34 - Carrefour has strong brand equity rating and can be considered as a strong brand. This is driven by strong awareness and high association ratings for value-for-money and wide product range. Carrefour Base: All Supermarket / Hypermarket shoppers (n=358) Store Equity Indices – Supermarket / Hypermarket Average across all chains = 1.92

Copyright 2004 ACNielsen ShopperTrends 35 Store Associations : What drives Store Equity

Copyright 2004 ACNielsen ShopperTrends 36 Recommenders (%) Preferrers (%) Dependables (%) Regulars (%) Considerers (%) Trialists (%) Aware (%) Non considerers (%) Too Hard to Get to (%) Base: All Supermarket / Hypermarket shoppers (n=358) Carrefour Chain A Note: TOM = Top-of-Mind; TSA= Total Unaided Awareness; TA= Total Unaided & Aided TOM TSA TA Hypermarket Leverage - Carrefour has the strongest consumer relationships at all levels of the consumer hierarchy Chain B

Copyright 2004 ACNielsen ShopperTrends 37 Top 10 Key Drivers of Store Choice (derived importance) Good value for money and wide product range are some of the main drivers for choice of store type used The values refer to the contribution to Store Equity Index. A value of 0,4 indicates a strong contribution.

Copyright 2004 ACNielsen ShopperTrends 38 Store Equity Index Store Loyalty Price Premium Location (7%) Fresh Products (13%) Value for Money (12%) Awareness (57%) Quality Store (11%) WINNING B®ANDS™ - Drivers of Hypermarket/Supermarket Model - ASSOCIATIONS:

Copyright 2004 ACNielsen ShopperTrends 39 Base: All Respondents Associations as Drivers of Trade Types Visited in Past 4 Weeks Drivers of Trade Types Visited P4W Good range of fresh produce0.17 High quality of fresh produce0.11 Good value for money0.21 Wide product range and variety0.21 Everything I need in one shop0.18 Low prices for most items0.15 Always have what I want in stock0.14 Ease of parking0.13 Spacious0.13 Well presented display of products0.16 Staff provide good service 0.14 Better selection of high quality brands and products0.14 Modern, confortable store0.12 Easy to find quickly what I need0.12 Clean, hygienic store0.08 Convenient to get to0.08 Proximity to home0.02 Location (7%) Fresh Products (13%) Value for Money (12%) Quality Store (11%)

Copyright 2004 ACNielsen ShopperTrends 40 Store Image Associations

Copyright 2004 ACNielsen ShopperTrends 41 MostLeast Brand Equity Differentiation Base: All who rated particular hypermarket./supermarket Performance = % top two boxes out of 5 scale Top 6 Associations - Image Profile Analysis - Key Int’l Retailers Carrefour is more strongly associated with ‘attractive & interesting promotions’

Copyright 2004 ACNielsen ShopperTrends 42 Shopper Behavior

Copyright 2004 ACNielsen ShopperTrends 43 Ref: Q47 % of respondents Incidence of Planned Shopping Vs. Impulse - A slight majority buy according plan, but occasionally do impulse buying - One-third claim to always engage in impulse-buying Base: All Supermarket/Hypermarket shoppers (n=358)

Copyright 2004 ACNielsen ShopperTrends 44 Ref: Q67 Level of Interest in New Things on the Market A close majority could be labeled as innovators Base: All Supermarket / Hypermarket shoppers (n=358)

Copyright 2004 ACNielsen ShopperTrends 45 Summary Main shopping is strongly dominated by females Majority of shoppers shop at both modern and traditional trade stores without being loyal to a trade channel type The incidence of shopping around among hypers/supers is high, implying low loyalty levels Shoppers spend more in Supermarkets than in any other Modern Trade type Supermarkets and Hypermarkets still have a challenge and opportunity in the area of fresh fruits/vegetables vs Open Markets and Specialist outlets Store Equity Awareness is clearly a key driver Consideration is not a key driver of Store Equity, given the consistently high acceptance levels for all stores In terms of Associations (attributes), fresh products, value-for-money and store quality are similar in terms of importance for driving the Store Equity Each of the above associations are dependant on multiple factors as opposed to a few key factors

Copyright 2004 ACNielsen ShopperTrends 46 THANK YOU FOR YOUR ATTENTION!

Copyright 2004 ACNielsen ShopperTrends 47 Building Better Brands