FOOD DIRECTOR

XII "FOOD DIRECTOR" BUSINESS FORUM

FOOD RETAIL 2007:
RIDING THE MARKET CONSOLIDATION WAVE
• the best strategies and operation technologies
 for the consolidation stage •

Co-Chairmen of the Business Forum:
RON VIRTA, Vice-President of WAL MART INT.
ALEXANDER SAMONOV, Presidium Chairman of AKORT
 

• 500 top managers of retail networks and producers
• 30 sessions on strategies and working methods
• Analysing promising local markets:
  UKRAINE, BYELORUSSIA, KAZAKHSTAN, RUSSIAN REGIONS
• 60 speeches by top managers and food retail experts
• The results of the BBPG-RBC rating "The Best Retail Network"
• Who is who in Food Retail 2007
• Preliminary organization of meetings between participants
   

CLIVE WOODGER, SСG LONDON
Branding for ASDA, METRO, TESCO, “Azbuka Vkusa”

PETER VRIJSEN
ex-Board member of METRO C&C INT.

DR. HEINZ-JOACHIM HEISE
Recruiting managers for Metro Ca&C in Russia and in the Ukraine

ROLF GL?CKLER
EX-Board member of DANONE

The main trend of the 2007 retail market is consolidation. From the point of view of most retail network owners this trend is a negative one: it becomes impossible to catch up with leading networks and their resources in the competition race, the number of modern shops increases rapidly and the struggle for the customer becomes frantic, in particular, due to the growth of modern networks the specific sales volume decreases (turnover per square meter) even now.

Evaluating the situation in the market as independent experts, we claim that:
(a) consolidation is inevitable. No kind of "Russian peculiarity" can substantially influence this process, since consolidated business is more efficient: specific costs decrease, while purchasing capacity and capacity of attracting and keeping consumers increase. Consolidation is a perfectly market trend, and is natural for the modern stage of development;
(b) there are successful business strategies that allow to turn consolidation into an engine for the company's own efficiency and capitalization increase.

1. The strategy of "leaving the business". While the major operators in the market strive to grow at ultrahigh rates, competition appears in the acquisition market. Consequently, potential cost of enterprises to be sold increases in a short space of time. For a local network, developing formats that are relevant for major players and structuring its assets means an increase in capitalization.

2. "Merger" strategy. Company merger is one of the successful models that were "prompted" by the leaders to medium bracket companies. According to our data, the majority of large local networks consider a possibility of merging with adequate partners. The general trend of consolidation dictates the possibility and the schemes of such bargains. Several mergers and alliances were already effected in the Russian market and in the regional networks sector. 

3. The strategy of "competing with an obvious leader". The consolidation of players, their tendency for more distinct positioning and formatting allow to define competition-free niches with more accuracy. In order to "survive in the shadow" one must understand clearly who sets mass successful formats, and what are they. Today the consolidation answers these questions. Choosing free competition niches becomes easier and more transparent, and the tactics of competitive struggle against an obvious leader has already been studied in global practice.

The success of both competition-aimed strategies - both mergers/acquisitions and niche retail - depends on finding and developing unique competitive advantages of a network in the area of nonprice competition and dealing with the ultimate consumer in cooperation with the supplier. In general, the medium bracket players definitely have a choice of successful strategies. What should, however, be avoided, is nonresponsiveness to global changes in the market. Putting strategic decisions off for tomorrow means losing the business irrevocably!

1. Forum’s guest (without placement in hotel)

• Cost amounts to ? 1195 for two and ?755 for one top-manager, representing retail company, and includes:
  1.1. Full business program of the Forum: participation in plenary meetings, lections, round table discussions; brain storms and trainings, participation in the communication program - "Force Communication &Team Solutions", negotiations in the companies-suppliers show-rooms and participation in any other Forum events, held in Holiday Inn Hotel;
  1.2. Lunch and coffee breaks;
  1.3. Participation in the evening receptions on February 8 and 9;
  1.4. "Workbook of the Forum participant" and List of Participants with contact details;
  1.5. Presentations on CD - "Food director Review".
  For the first time ever! You can take part in the BBPG catalogue "Who is who in the retail market". Information about your company and its heads in the printed materials of the Forum;
  For the first time ever! Help from BBPG in preliminary organization of business meetings at the Forum.
   
• Cost amounts to ? 1595 for two and ? 955 for one top-manager, representing company-supplier and includes:
  Items 1.1.- 1.5 plus placement of the business information about the company (area of activity, brands, website address) in the working materials of the Forum.

2. Forum Participant (including accommodation* in  Holiday**** Inn Hotel):

• Cost amounts to ? 95 for one participant at a double room of Holiday Inn Hotel for the 
  1 night
• Cost amounts to ?150 for one participant at a single room of Holiday Inn Hotel for the 1
  night

*Check in /check out time for hotel is 12.00.

3. Participation at special prrogram on 10 February:

• Business exursion. New establishments of retail networks: three establishments altogether.
  Cost amounts to ?75 for one participant
• Strategic business game "BUSINESS STRATEGIES OF THE RETAIL CONSOLIDATION STAGE" 
  by the international company Celemi.  Cost amounts to ?299 for one participant