State of the Global Retailing Industry in 2014

TRENDS AND INSIGHTS IN THE GLOBAL RETAILING
MARKET
2013
POWERED BY PASSPORT FROM EUROMONITOR INTERNATIONAL

WHAT IS PASSPORT
NEW INSIGHTS: RETAILING FOR RETAILERS
WHAT IS NEW IN GROCERY RETAILING?
WHAT IS NEW IN NON-GROCERY RETAILING?
NEW RESEARCH IN NON-GROCERY
NEW RESEARCH IN NON-STORE
PASSPORT: RETAILING DATA UPDATE FOR 2014

© Euromonitor International
3
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OVERVIEW OF PASSPORT

6
Retailing Overview: Key Highlights for 2013
13.9tnUS$ total retail
sales in 2013
12.3%Mobile internet
sales as share of
internet retailing in
2013
124bnUS$ total retail sales
of Apparel &
footwear online in
2013

7
Unit Prices
Sales per store
Sales per square metre
Size of average store
Store density - stores per person
Store openings and closures
How can retailers use our data?
Unit price data are available for both market
sizes and shares (store-based channels only).
This is one of the basic retail metrics that
offers comparable information on retailer
profitability and sales efficiency

8
Store density: People per store
Reverse per capita data which show people per store makes easy comparison and
helps answer questions such as: Can the UK reach a similar level to the rest of Europe
in discounters?

9
New store openings
Volume data - number of stores shows convenience stores and discounters with most
new store openings in 2013 in Western Europe

10
How large are stores?
Unit price data such as square metre per outlet.
UK stores are generally smaller in comparison with other European markets

11
Sales space utilisation: Sales per square metre
Unit price - sales per square metre for comparison of different channels.
UK selling space one of the most profitable in Europe

12
Sales per square metre: Most productive retailers
Unit price review of sales per square metre - comparison of stores with different sizes
via brand share

13
Industry overlap
Retailing overlaps with most product
system data on Passport which can
be of great help to retailers finding
out
 which products are in demand
 what consumers are purchasing.
Most grocery retailers are interested
in this information in order to find
out:
 which products to stock
 which companies they need to
negotiate with
 most importantly - for private
label - which products to develop
internally

14
Product systems provide insight into product sales and performance
This information is very important to retailers, particularly for private label
development
What do we stack our shelves with?

15
Types of retailers
 Sold mostly through specialist stores
 Often retailers are vertically integrated
 Lower share of private label
 High to very high online sales
 Apparel
 Home and Garden
 Electronics and Appliance
 Personal Accessories and Eyewear
 Luxury
 Toys and Games
 Food and Drink
 Home Care & Tissue
 Beauty and Personal Care
 Pets
 Tobacco
 Health
 Sold mostly through grocery retailers
 Limited specialist channel involvement
 Private label is important for retailers
 Relatively low online sales
Grocery: Non-Specialists Key issues impacting non-specialists
Non-Grocery: Specialists Key issues impacting specialists

16
Specialist vs non-specialist retailers
Grocery Retailers Overlap
Modern Grocery Retailers Most systems
Convenience Stores
Discounters
Forecourt Retailers
Hypermarkets
Supermarkets
Traditional Grocery Retailers
Food/Drink/Tobacco Specialists Tobacco
Independent Small Grocers
Other Grocery Retailers
Non-Grocery Retailers Overlap
Apparel and Footwear Specialist Apparel & footwear
Electronics and Appliance Specialists Electronics and Appliances
Health and Beauty Specialist
Beauty Specialist Retailers Beauty & personal care
Chemists/Pharmacies Consumer Health
Optical Goods Stores Eyewear
Parapharmacies/Drugstores Consumer health
Other Healthcare Specialist Retailers
Home and Garden Specialist Retailers
Home Improvement and Gardening Home and garden
Furniture and Homewares Stores Home and garden
Leisure and Personal Goods
Bags and Luggage Specialist Personal accessories
Jewellery and Watch Specialist Personal accessories
Media Products Stores Toys and games
Pet Shops and Superstores Pet care
Sports Goods Stores Apparel & footwear
Stationers/Office Supply Stores Persona Accessories
Traditional Toys and Games Stores Toys and games
Other Leisure and Personal Goods
Mixed Retailers Overlap
Department Stores Most systems
Mass Merchandisers Most systems
Variety Stores Most systems
Warehouse Clubs Most systems
List of all store based channels. Those in back are
usually non-specialists offering wide range of
products, those in blue are specialists where overlap
with the corresponding industry is smaller, while
those in orange have big overlap

18
Key findings for grocery retailing
NEW INSIGHTS: WHAT IS NEW IN GROCERY RETAILING?
Small vs large store formats
Discounting
Middle East and Africa

19
Towards modern grocery channels: A pronounced shift in emerging markets but
traditional formats are still prominent
Convenience stores and discounters: Stronger growth than large formats, but remain
dependent on developed markets in Asia and Europe
Grocery channel growth: Small modern grocery formats gain most
0.0
0.4
0.8
1.2
1.6
2.0
2.4
2.8
3.2
3.6
0
250
500
750
1,000
1,250
1,500
1,750
2,000
2,250
Traditional grocery
retailers
Supermarkets Hypermarkets Convenience
stores
Discounters
%CAGR2013-2018
US$billion-constant2013
pricesfixed2013exchange
rates
Global Grocery Retailing by Channel - Market Sizes (RSP exc Sales Tax)
2008-2018
2008 2013 2013-18 CAGR %
China: Market Sizes - % Breakdown of Grocery Retailers 2008/2013
RSP exc Sales Tax 2008 2013
Modern Grocery Retailers 56.9 64.5
Traditional Grocery Retailers 43.1 35.5

20
Sales per square metre: Price pressure and over-expansion puts extra pressure on
hypermarkets
Demographic challenges impact large stores: How to remain a relevant channel for
smaller households and retain a wide customer base
Maturity and over-expansion in large modern grocery retail formats
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
7,000
7,500
2008 2009 2010 2011 2012 2013
US$persqm-constant2013prices
fixed2013exchangerates2008-2013
World: Unit Price - Sales per sq m
by Channel 2008-2013
Convenience Stores Discounters
Hypermarkets Supermarkets
Mass Merchandisers
20%
30%
40%
50%
60%
70%
1998 2003 2008 2013 2018
Shareofhouseholds
Households: Proportion of
Households with 1 or 2 Persons by
Region 1998-2018
Western Europe North America
Australasia Eastern Europe
Asia Pacific Latin America
Middle East and Africa

21
Fresh food: An increasingly key element in differentiating hypermarkets from smaller
store formats and internet retailers
Services to make stores “destinations”: Innovations aim at allocating extra selling space
to non-retail activities, eg banking and foodservice, in order to boost footfall
Hypermarkets’ differentiation strategies

22
Expansion in emerging markets: Strong gains fuelled by making inroads against
traditional channels
Channel consolidation: 7-Eleven, Family Mart, Lawson expand in Asia, Metro in
Eastern Europe
Recent and future market entries: Indonesia, Kazakhstan, Myanmar, etc for global
players
Convenience stores: Franchising drives emerging market growth
Metro: +
3,023 outlets
Others
+6,185
Western
Europe
+5,880
Eastern Europe
+20,971
Asia Pacific
+50,244
7-Eleven: +
13,270
outlets
Additional sites/outlets for convenience stores
globally 2008-2013

23
Concepts: More sophisticated segmentation, ranging from value to premium. Carrefour
launches Carrefour Bio to explore more premium positioning, while Lawson launches
Lawson 100 Store to explore value proposition and compete better with fixed priced
stores
Private label: Ambitious private label sales targets for Japanese companies, with more
refined positioning
Innovations in convenience stores: Store concepts and private label
Value
private
label

24
Fastest modern grocery channels by region in 2013
Current value growth
% 2012-2013
Discounters
Convenience Stores
Discounters is the channel to see fastest growth in
2013 in developed regions, including North America
and Western Europe
In Latin America and Eastern Europe, the
convenience stores channel performs the best

25
Growing impact of discounting on grocery retailing
Discounting - Key Points
 Economic slowdown benefited discounters
 Change in consumers’ purchasing habits is
proving to last longer than originally
anticipated
 Discounters forecast to see 3% CAGR growth
by 2018
 Aldi and Schwarz lead the channel
 Convergence between discounting and
grocery retailing, ie discount areas in
traditional supermarkets and hypermarkets,
or more fresh food and brand choice in
discounters
 Rise of another discounting channel: variety
stores
0% 5% 10% 15% 20% 25%
Aldi Group
Schwarz Beteiligungs
Wal-Mart Stores Inc
Edeka Zentrale AG
Rewe Group
Supervalu Inc
Dia SA
Leading Discounters 2013
0.0%
2.5%
5.0%
7.5%
10.0%
12.5%
0%
10%
20%
30%
40%
50%
CAGR2013-2018
Discounterssalesshareof
moderngroceryretailers
Discounters as % of Modern Grocery
Retailers 2013 and Discounters’ Growth
Prospects 2013-2018
Discounters as a % of modern grocery retailing in 2013 % CAGR 2013-2018
42%

26
Related publications available on Passport

27
Africa, the most dynamic region for grocery retailers
72%
TRADITIONAL GROCERY
RETAILING REMAINS
PREDOMINANT IN 2013
MEA IS THE REGION WHERE
MODERN GROCERY
RETAILERS POST FASTEST
GROWTH IN 2013
99bn
MEA’S CONTRIBUTION IN US$
TO MODERN GROCERY
RETAILING IN THE NEXT FIVE
YEARS
Middle East and Africa - Key Points
 Independent small grocers still dominate but continued
shift from traditional to modern grocery retailers
 Growth driven by young population, continued rise in
disposable income, ongoing modernisation of the retail
landscape and growing car ownership
 Difficult region to enter due to cultural differences, business
regulations but huge rewards for retailers
 Franchising is the main route for international retailers
0%
2%
4%
6%
8%
10%
12%
14%
Middle
East
and
Africa
Latin
America
Eastern
Europe
Asia
Pacific
North
America
Austra-
lasia
Western
Europe
Y-o-ygrowth(US$currentfixed
exchangerates)
Retail Sales Growth by Region 2011-2013
2011-12 2012-13
12%

28
Africa, a key interest for retailers
Research capabilities within Africa &
Middle East
 Researched markets in dark blue
 Research data based on input from
in country analysts based in the
researched countries
 Modelled countries received extra
time for review and modelling
 Additional research capabilities with
new office in South Africa
 Additional content for some of the
key companies and countries in the
region (opinion pieces, company
profiles) including for modelled
markets.

29
Related publications available on Passport

31
Competition from internet retailing
Rising demand in emerging markets
Effect of continuing economic pressure on
developed markets
Appetite for luxury goods in emerging markets
(and beyond, in the shape of tourist shopping
revenues)
Non-grocery retail: Key trends
NEW INSIGHTS: WHAT IS NEW IN NON-GROCERY RETAILING?
0
20
40
60
80
%
Grocery Retail as % of Total Spend 2013/2018
(Chart shows the 10 markets forecast to see the biggest shift)
2013 2018
As the proportion of spending
to subsistence products (ie
food and household) reduces, a
greater share is available for
discretionary purchases, benefiting
the non-grocery channel.
This represents space in the market
that retailers can look to move into

32
Competition from other channels
Savvier and more demanding
consumers
Product penetration
Retail property options
Demographic and other
socioeconomic data
Housing market
Fashion and trends
Technological innovations
Discretionary non-grocery spend easily affected by wider concerns
NEW INSIGHTS: WHAT IS NEW IN NON-GROCERY RETAILING?
Internet retailing is the
obvious threat, but another
issue for brand
manufacturers especially is
the move into non-grocery
retail by big-box grocery
chains, as they will often
develop a private label
offer, eg Tesco’s F+F and
Walmart’s George apparel
labels, both now
international in scale

34
New channel: Optical goods stores…the basics
NEW INSIGHTS: NEW RESEARCH IN NON-GROCERY
The Small Print:
Specialist retailers with a primary focus on:
 spectacles, and/or
 contact lenses, and/or
 sunglasses
 Prescription and non-prescription sales
both included
 Revenue from services such as eye tests
excluded
Optical goods stores were previously
included within other healthcare
specialists retailers.
Broken out to provide greater visibility
to a key distribution channel within
the Eyewear system

35
Optical goods stores: What is the data telling us?
Market size: US$87 billion
(1.3% of total non-grocery retail)
Who is interested? Optical goods stores and brand
manufacturers. Luxury and apparel retailers.
Healthcare companies. Suppliers (lenses, plastics
etc). Franchise operators
0 10 20
Russia
Italy
UK
Canada
Japan
Germany
Brazil
France
US
China
Value sales 2013 (US$ billion)
10 Biggest Markets 2013
6%
share
0 5 10
Paris Miki
HVHC
Meganetop
Alain Afflelou
Guildinvest-Krys
Optic 2000
Fielmann
Specsavers
GrandVision
Luxottica
10 Biggest Companies 2013
Optical goods stores is a
long-established channel
serving consumers from
across the income
spectrum. This means
stores are present in almost
every market, and there are
many established chains.
However, beyond the top
five global companies,
multinational presence is
extremely limited. Scope
for consolidation perhaps?

36
New channel: Bags and luggage specialists…the basics
The Small Print:
 Retail outlets specialising in the sale of bags or
luggage
 Includes backpacks, duffel bags, cross-body
bags, business bags, wallets and coin pouches
and other small bags, as well as handbags and
suitcases
 Duty-free sales are excluded from data
As many bags and luggage specialists are
located beyond the departure gates, this
is a significant factor for our data
Broken out to provide greater visibility to a
key distribution channel within the Personal
Accessories system

37
Bag and luggage specialists: What is the data telling us?
Who is interested? Luxury retailers, fashion and
accessory retailers. Bag and luggage brands. Leather
and other materials suppliers
0 100 200
Portugal
Belgium
Taiwan
Austria
Italy
France
Australia
Switzerland
Singapore
Hong Kong, China
Value sales 2013 (US$)
10 Highest per Capita
Spend Markets 2013
11%
share
0 5 10
Loewe
Samsonite
Miu Miu
Chanel
Bottega Veneta
Hermès
Prada
Gucci
Coach
Louis Vuitton
10 Biggest Brands 2013
Beyond the top five
brands, this is a very
fragmented channel.
Global luggage brands
with their own stores are
particularly rare. Due to
the importance of luxury
brands, and the
somewhat niche nature
of the channel, it is
absent from a number of
emerging markets

38
Interplay with Personal Accessories and Eyewear systems
Things to Remember:
 Personal Accessories and Eyewear data
include sales tax - retailing size data
including sales tax are available on
Passport
 Personal Accessories and Eyewear
research currently covers 32 markets
only
A key element of the Eyewear system’s
distribution measure can now be
fleshed out within retailing data

39
New data: Luxury retail…the basics
The Small Print:
 Retailers selling luxury brands, as defined by the luxury industry - list available
 Multi-brand retailers must have listed luxury brands making up over half of their range
 Luxury department stores house at least one luxury “shop-in-shop” concession
 Side benefit - extensive top-down research should benefit retail coverage of top luxury marques
 Available for 2011-2013
Luxury retail is an important
and distinct element of retail,
particularly with the arrival of
Euromonitor International’s
Luxury system, but brands
remain small within the context
of the total retail environment.
Data within the luxury retail
tree are also contained in non-
grocery retail, but duplicating it
in a dedicated section allows
luxury brands to be viewed in
context with each other

40
New data: Luxury retail…the basics
(about 5% of the combined size of the
four channels with non-luxury sales
included)
Who is interested? Luxury and non-luxury
retailers; luxury brands and suppliers. Store fitters.
Property developers. Franchise operators
0
15
30
45
US$billion
Luxury Retail by Region
2011 2012 2013
0
20
40
60
80
100
2011 2012 2013
US$billion
Luxury Retail by Channel
Luxury Jewellery and Watch
Luxury Department Stores
Luxury Bags and Luggage
Luxury Apparel and Footwear
Bags and luggage and
apparel and footwear
specialists are fastest
growing formats,
more suitable for new
emerging markets
than jewellery and
watch specialists,
which have high unit
prices, and
department stores,
which require large-
scale property
investment and multi-
brand involvement

42
New data: Apparel and footwear internet retailing…the basics
NEW INSIGHTS: NEW RESEARCH IN NON-STORE
The Small Print:
 Internet retail brands that generate a
significant proportion of sales through apparel
products
 Not restricted to apparel specialists, also
includes department store online brands
 Brand shares for 2011-2013 only
Shares for Apparel
and footwear
internet retailers

43
Apparel and footwear internet retailing: What is the data telling us?
0
15
30
%
Amazon.com’s Share of Apparel and Footwear Internet Retailing by Country
2013
Who is interested? Apparel
retailers, brands and
manufacturers; fulfilment
operators; landlords; financial
cards providers

44
Mobile internet retailing…the basics
The Small Print:
 Analysis by type will
show sales completed
using a mobile phone
or tablet as a
percentage of internet
retailing
 Covers 2011-2016
It might be very new, but mobile internet retailing is rightly seen as
the next big thing in retailing (or one of them). The new data on the
penetration of mobile internet retailing within total internet retailing
give a useful picture of how advanced this trend is in each market.
It should be noted that the location-based qualities of mobile internet
give this the potential to enhance store-based sales also

45
Mobile internet retailing: What is the data telling us?
This datagraphic
(available on Passport)
demonstrates that mobile
internet retailing is
already significant in
markets across the world.
In emerging markets
such as India, the current
internet retailing
consumer base is
generally more affluent
and more likely to own a
smartphone, hence the
high penetration, but for
many emerging market
consumers, smartphones
will be the gateway to the
internet, rather than
computers, raising the
profile of this purchase
format further

46
All mobile phone/smartphone/social networking related content on Passport
Massive interest from clients re online activity and the influence that m-commerce
could hold
Data from other systems eg mobile phone penetration (C&C) and smartphone
prevalence (Consumer Electronics)
Survey data re mobile phone related habits such as shopping and socialising
Mobile internet retailing complements existing Passport offer

48
Shares
PASSPORT: RETAILING DATABASE UPDATES
Passport does not show shares less than 0.1%
Many companies and brands are hidden
Actual share of “Others” is 56%, while Passport shows 74.4% as
smaller brands are not shown

49
The Retailing system provides data for over 6,000 global companies and over 8,500
global brand names. Duplicate company and brand names appearing in more than one
market are counted only once.
Some examples of channels with the highest number of brands
UK Apparel & Footwear - over 70 companies
US Internet Retailing - over 90 companies
Egypt Electronics and Appliance Specialists - 25
China - most department stores, hypermarkets and supermarkets
Shares in Passport

50
 Modern and traditional channels
 Includes independents
Channel coverage: Grocery
Channels Shares Additional data
Grocery Retailers Yes
Modern Grocery Retailers Yes
Convenience Stores Yes
Discounters Yes
Forecourt Retailers Yes
Chained Forecourt Retailers Yes
Independent Forecourt Retailers No
Hypermarkets Yes Grocery vs non-grocery
Supermarkets Yes Grocery vs non-grocery
Traditional Grocery Retailers Yes
Food/Drink/Tobacco Specialists Yes
Independent Small Grocers No
Other Grocery Retailers Yes

51
Additional data available for:
Luxury retailers within:
Apparel and footwear specialists
Bags and luggage specialists
Jewellery and watch specialists
Department stores
Channel coverage: Non-grocery
Channels Shares
Non-Grocery Retailers Yes
Apparel and Footwear Specialist Retailers Yes
Electronics and Appliance Specialist Retailers Yes
Health and Beauty Specialist Retailers Yes
Beauty Specialist Retailers Yes
Chemists/Pharmacies Yes
Optical Goods Stores Yes
Drugstores/Parapharmacies Yes
Other Healthcare Specialist Retailers Yes
Home and Garden Specialist Retailers Yes
Home Improvement and Gardening Stores Yes
Furniture and Homewares Stores Yes
Leisure and Personal Goods Specialist Retailers Yes
Bags and Luggage Specialist Retailers Yes
Jewellery and Watch Specialist Retailers Yes
Media Products Stores Yes
Pet Shops and Superstores Yes
Sports Goods Stores Yes
Stationers/Office Supply Stores Yes
Traditional Toys and Games Stores Yes
Other Leisure and Personal Goods Specialist Retailers Yes
Mixed Retailers Yes
Department Stores Yes
Mass Merchandisers Yes
Variety Stores Yes
Warehouse Clubs Yes
Other Non-Grocery Retailers Yes

52
Data available for:
 4 non-store channels
 43 product categories
Additional data:
 Apparel and footwear internet retailing
shares
 Mobile internet retailing breakdowns
 Pure vs multi-channel internet retailers
shares
Channel coverage: Non-store
Channels Shares Additional data
Non-Store Retailing Yes
Direct Selling Yes
Homeshopping Yes
Internet Retailing Yes Mobile Internet
Vending Yes
Product data
Internet Retailing/Direct Selling/Homeshopping Channels
Beauty and Personal Care
Apparel and Footwear
Consumer Electronics and Video Games Hardware
Consumer Healthcare
Consumer Appliances
Home Care
Home Improvement and Gardening
Housewares and Home Furnishings
Media Products
Food and Drink
Traditional Toys and Games
Other
Vending Channel
Packaged Drinks Vending
Packaged Foods Vending
Personal Hygiene Products Vending
Tobacco Products Vending
Hot Drinks Vending
Traditional Toys and Games Vending
Other Products Vending

53
US: Data on 22 states and regions
Pacific
Mountain
Middle
Atlantic
New England
West North
Central
East North
Central
Northeast
West South
Central
East
South
Central
South
Atlantic
South
Regional data available for the US:
 Sizes in value and number of outlets
 2002-2018
West Midwest

54
Pure play vs multi-channel

55
Data available in four data points:
Value sales excluding VAT - default data point for sizes
Value sales including VAT - for sizes only
Outlets/sites - for store-based retailers
Selling space - for store-based retailers
80 researched markets
Additional metrics:
Employment in retailing
Grocery vs non-grocery retailing
Other points

56
Euromonitor Retailing team is working with third parties to produce very interesting
content which available both on Passport and on blog.euromointor.com for free and
have been received extremely well so far
Asia Pacific Top 500 Retailers Top 5 – produced in collaboration with Retail Asia
Internationalisation of Retailing for ICSC World Retail Summit
Retail Theft Barometer in conjunction with Checkpoint
Retailing Trends in North and South America
Further content

57
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Company
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research
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infrastructure
Complete, detailed
insights
Research
Quality delivery systems
Hands-on client support
Strong return on your
research investment
Delivery
Conclusion: Why Passport?
PASSPORT

REQUEST A PASSPORT DEMO
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State of the Global Retailing Industry in 2014

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