Transcript D.Stojanov F&V

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-(summertomatoes 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 InfoDB,Integrated Info-Systems)
 The import products are concentrated in a
small number of companies.Lack of strong
competition, price regulation
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