slovakia market overview - bord bia · grocery retail market ... • chained consumer foodservice...
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Slovakia
Market Overview
Bord Bia, Frankfurt
November 27th 2008
Slovakian Market Overview
• Population: 5.4 million. The main cities are Presov (790,000), Kosice (766,000), Nitra (713,000) and Zilina (692,000). Bratislava has a population of 599,000.
• Language: Slovak
• Currency: Slovak Koruna SKK €1 = 30.47 SKK (ECB, October 2008)
• Joined the EU in May 2004
Market Overview
• Great wealth gap between the country and the other Western Countries. GDP
per capita €9,567 (2008(e)) v. Germany €30,546 (2008(e)) (IGD,2008)
• GDP Growth - real growth rate 6.5% 2008 (IGD, 2008)
• Inflation rate: 2.3% (2008(e)) (IGD, 2008)
• Unemployment: 9.5% (2008(e)) (IGD, 2008)
• Consumer spending increasing up from €775 in 2004 to €980 in 2008 (IGD,
2008)
• VAT: 19%
• VAT on Medicines: 10%
Irish Export Performance
Source: CSO Food and Drink Statistics 2007
Fish
71%
Dairy
1%
Live animals
2%
Beverages
25%
Animal Feed
1%
Coffee
0%
Irish Exports to Slovakia (2007)
Total value of
exports:
€1.1 million
Key Consumer Trends
in the Market
• Solid growth in retail sector.
• Per capita spending is increasing but is still significantly lower than in Western
Europe.
• 40% of retail sales in Slovakia are generated through the food retail sector.
Source: IGD Country Presentations, 2008
979.74
5.32
13.00
2008 (e)
(€)
931.99
5.07
12.3
2007
(€)
880.29Grocery Retail Spend/capita
4.78Grocery Retail Market (billions)
11.46Total Retail Market (billions)
2006
(€)
Retail Grocery Market
• Grocery Retail Value: €5.32 billion
• Hypermarkets leading store format, projected to be 30% of the market in
2010, was 23% in 2005 (IGD, 2007).
• Most retail activity is concentrated in Bratislava, which houses 25% of
the country’s population but Bratislava also has a higher percentage of
the country’s purchasing power (IGD, 2007).
• Discount: Lidl is the only discounter in the market and they entered the
country in September 2004. Tesco has recently rolled out their discount
format.
Retail Grocery Market
• Small and medium independent retailers are declining but play an
important role, especially in rural areas.
• Cash & Carry sector: Dominated by German Metro. The Metro group
had sales of €289 million in 2006 and managed to achieve an 11%
increase in sales, without opening any new stores. They currently only
have 5 stores.
• Coop are the clear market leader in Slovakia and have over 2,300
stores. They are however planning to rationalise stores over coming
years especially in the Progaviny arm of the chain.
Source: IGD, Country Presentations 2008
Retail Market Share
Hypernova is part of Ahold group.
Source: IGD Analysis Country Presentation Slovakia
Other
29%
Coop
Jednota
24%
Lidl &
Schwarz
9%
Tesco
13%
Carrefour
1% Hypernova
2%
Metro
2%
CBA
6%
Kaufland
8%
Rewe
6%
Retail Market Structure
Top 10 2006
Source: IGD Analysis, Country Presentation, Slovakia, 2007
7.0
14.3
0.0
3.9
11.1
29.4
19.0(1)
7.1
Yr on Yr
Change (%)
31,00042.43%116116Carrefour
159,0006511.51%550550Lidl & Schwarz
234,7664813.85%662726Tesco
80,510252.24%107107Ahold
61,000122-120120M-Market
131,200875.73%274274Rewe
38,7005-389389Metro
1,386,0002,32220.21%966966Coop Jednota
Sales Area
(sqm)
No. of
Stores
Grocery
Market Share
(%)
Grocery
Sales
(€m)
Total
Sales
(€m)
Retailer
Private Label
Private Label Share % (2006)
Source: IGD Analysis Country Presentation Slovakia, 2007
22.9
0.7
14.8 13.416.120.221
23.925.7
30.0
88.9
0
10
20
30
40
50
60
70
80
90
100
Lidl & Schwarz
Kaufland
Tesco
Kaufland
Coop Jednota
Rew
eCBA
Metro
Hypernova
Carrefour
Totall all outlets
% Private Label
Foodservice Trends
• 2006 was a good year for Slovakian foodservice which saw an increase
in the number of outlets and an increase in the number of international
chained consumer foodservice players.
• Disposable income also increased and as such Slovakians are
becoming more open to dining out, this trend looks set to continue.
• McDonald’s has been the dominant fast food chain since 1995 but KFC
opened their first outlet in September 2006 and they now have 7. Pizza
Hut are also present in the market.
• Independent consumer foodservice dominates in terms of value share,
transactions and number of units/outlets.
• Chained consumer foodservice outlets are mainly found in shopping
centres and in and around Bratislava. There are very few chained
outlets in towns. This is an opportunity for expansion.
Source: adopted from Euromonitor, 2007
Foodservice
Trends
• Consumer foodservice is expected to perform well in coming years.
There will be an increase in numbers of consumers and outlets -
especially in 100% home delivery/take away.
• Slovakia had the highest GDP growth in all the EU in 2006 and this
growth is expected to continue.
• The growth in the economy has led to increased disposable income
and a rise in the number of shopping malls which all have food courts -
leading to growth in foodservice.
• Coffee consumption has changed and it is now more of a leisure
activity with Coffee Heaven being an example of a new brand entering
the chained specialist coffee shops.
Source: adopted from Euromonitor, 2007
Chained Consumer Foodservice Brand
Share - by value and by number of
outlets
0
5
10
15
20
25
Coffee & Co.
Espresso
Caffee Mauro
McDonald's
Steam & Coffee
Pizza Hut
Papa Chicken
Richman
Coffee Heaven
KFC
IKEA
Others
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
No of Outlets
Share %
Source: adopted from Euromonitor, 2007
Other Foodservice
Establishments
• Coffee Heaven
– Leading Eastern European Coffee Chain found in Poland, Czech
Republic, Latvia, Bulgaria, Slovakia
– Sells sandwiches and snacks as well as coffee
– Currently has a market share of 0.6% with 2 outlets.
– www.coffeeheaven.eu.com
Foodservice
Establishments
• McDonalds
– The largest chained consumer foodservice brand in Slovakia
currently in terms of market share at over 40%. The next closest
brand was KFC in 2006 with almost 12%.
– Offer the traditional McDonald’s menu.
Foodservice
Establishments
• Papa Chicken
– Have just opened their first outlets as
a franchise - September 2008.
– Located in 4 shopping centres.
– Offer a range of foods such as:
• Grilled chicken
• Baked chicken
• Fresh vegetables
• Kebabs
• Schnitzels
Reasons for targeting Slovakia
• Adoption of Euro (Jan 1st 2009)
• Second highest GDP growth (9%) in Eastern Europe in 2007 with +7%
forecast for 2009 (IGD)
• Strong presence of western retail operators
• Local infrastructure continuing to improve
Barriers/challenges in supplying
Slovak market
• Small population (5.4m)
• Low disposable income €3,438 per capita/p.a.
• Local language barrier
Bord Bia services 2009
• Bord Bia market mentor (Mr. Kieran Fahy) available for Eastern Europe market and trade related queries:
• Services include: Itinerary Development, Category Analysis, Media review and translation services, Product Price auditing and tracking, Product retrieval, Buyer networking, Distributor searches
Kieran Fahy Also: Liam MacHale
Sarospatak ut 32 Bord Bia
1125 Budapest Wöhler Str. 3-5
Hungary 60323 Frankfurt, Germany
Tel: +36 706 144871 Tel +49 69 710 423 255
Email: [email protected] Email: [email protected]