| KEY TRENDS | DESCRIPTION | CONCLUSIONS | X5 RESPONSE |
| Changing demographics | - Growth of 60+ age population by 2-3% p.a. vs. reduction of 20-29 year group by 6% p.a.
| - Growth of price-sensitive consumer segment
- Growth of proximity format popularity
| - Continued expansion of proximity segment (>75% of X5 revenues)
- 5-10% discounts for pensioners in a first half of a day
- Focus on mothers with children
|
| Declining incomes |
- Increased price sensitivitym and rational spending
- Growth of “cherry pickers”
| - Growth in attractiveness of proximity/discounters
- Increased pressure on margins (need for opex reduction)
| - Constant adaptation of value proposition to customers’ needs
- Best-in-class “promo engine”
|
| Growing competition
| - Retail space saturation
- “Value” format development (e.g., hard discounters, dollar stores)
| - Increasing pressure on LFL
- Increased pressure on margins (need for opex reduction)
| - Strong regional expansion with effective value proposition for small cities and towns
- Development and rollout of new regional supermarket concept
- Effective GIS system to help find optimal locations
|
| Spread of new technologies | - Growth of online shopping and price transparency
- Increase in Big Data analytics
| - Opportunity to improve competitiveness through service and personalisation
| - Online retail initiative within the supermarket segment
- Successful development of loyalty programme and personalised promo in Perekrestok
- Further implementation of advanced analytics
|
| Tightening market regulation
| - Retail trade legislation (back margin constraints)
- EGAIS and other control systems
- International sanctions
| - Additional costs due to new regulation
- Growing margin pressures
- Product shortages and price inflation
| - Self-regulation approach
- Switch to net-net pricing
- Strategic partnerships with suppliers
|
