Billa Bulgarien

Billa Bulgarien

Billa Bulgarien

Billa Bulgarien

Billa Bulgarien

RETAIL MARKET OVERVIEW

Early stage of development (market share of retail chains roughly 15%).

Relatively low competition: Metro (7) markets; HIT (2) and (5) local chains and some of them with unclear formats/concepts.

Consumers not yet differentiating between (e.g. supermarkets and cash & carry) retail format/concept.

Kaufland entry expected in 1st half of 2006 with 27 openings within 3-4 years.

Discounters expected in early 2007.

Big potential market –Billa is one of the biggest chain retailar for F&V

The retail market is fragmented , modern trade is represented unsufficiently. The green markets still hold more than 80% market share

Low level of organization of the wholesale markets/exchange ;simple processing ,handling and packaging; no standards in portion size

Fragmented production with local, regional distribution except of some greenhouses

Lack of modern, specialized logistic companies for fresh products ;CD platforms

Custom regulations and restrictions for imported goods –custom duties and quotas, minimum import price

The result - monopoly on the market of some products. This leads to higher price for lower quality

Our complicated supply chain

We have 16 stores with 5 regional groups of suppliers .(Sofia and province) Groupage deliveries for the main assortment Lower purchasing prices in the province Quality varies for each delivery , irregular timing Quality control in each store (add.personnel costs and retour costs) Inefficient logistic costs of the suppliers related

to their turnover -result is higher prices per kg.

Problems for Billa – Producers,Importers,Distributors

Quality – cheep varieties, fertilizers We have problem with the freshness-(summer-

tomatoes aging period)

Critical mass and price validity during promotions and for the daily deliveries. We have more than 10% turnover growth reserves if we manage to reduce the out of stock.

The producers do not have good planning, forecast for the quantities.

We developed our standards for the suppliers and we support the distributors to implement them on the production market

Problems for Billa – Producers,Importers,Distributors

The producers are not ready yet to invest in equipment - flexibility for portion size, packaging, labeling

They need trained personnel (like Billa’s employees) in order to work with modern retailers.

The logistic is oriented to wholesalers and not suitable for daily supplies to our stores

In most cases there are not interested to sell directly to us because of the postponed payment and bank

transfers( VAT Acc.)

Problems for Billa –Producers,Importers,Distributors

The producers and importers have short- term strategies(price and quantity) We could develop product and quantity programs on annual base

We do not have enough information about supply and demand.(national Info- DB,Integrated Info-Systems)

The import products are concentrated in a small number of companies.Lack of strong

competition, price regulation

Thank you for your attention !