The BBCG DIY & HOUSEHOLD RETAIL RUSSIA Congress attracted a record number of participants for the two days of the event.

24 national and international retail chains took part in the event with over 375 participants in total.

Participants came from 33 cities of the Russian federation, Belarus, Latvia, Germany, Great Britain, France, Italy and Poland.

Speakers included over 50 top managers of DIY and household retail chains, manufacturers and suppliers of goods for the DIY and household industry.

Media attendance at the event included Blizko Remont, Mebelnyi Business, Commersant, DIY International, Floornet, Torgovoe oborudovanie v Rossii (In-Store Equipment in Russia), Fortune: Bolshoi Business, Retail.ru, Vedomosti, Expert TV, The Moscow Times, First news, Advice.ru and General Director

The Congress was supported by the European DIY Retail Association (EDRA), uniting all the leading DIY retailers in Europe and for the first time by the European Federation of DIY Manufacturers (FEDIYMA).

Fiskars was the Congress Official Partner. Sponsors and exhibitors included Odgers Berndtson, B2B Print, Arcansas DIY Profiles, Roslogistics, Columbus IT, Malyarka, Fujitsu, Casa Vaga and Semin

The Awards ceremony of the II Annual Professional DIY & HOUSEHOLD AWARDS 2011 took place in the evening during the gala dinner. The winners were: «The Best Retailer of the Year » – OBI; «Supplier of the Year» – Tarkett RUS; «Personality of the Year» – Alexander Seleverstov, Uyuterra.

For the first time at the Forum we held supply negotiations between DIY and Household retailers, manufacturers and distributors. 24 retail chains and all the Forum’s delegates took part in the negotiations.

If you would like presentations from the congress please let me know at manley@b2bcg.ru

The website can be found at www.diyretail.ru

A presentation synopsis of a talk given by Clive Woodger, Managing Director and Owner of SCG London at the fifth international DIY and Household Congress 2011, Russia’s leading forum for the DIY industry, produced in association with EDRA, the European DIY-Retail Association on the 26-27th May.

The presentation provides an overview of consumer mindset changes, the challenge of sector convergence and growth of multi-channel retail. These factors highlight the need for a clearly articulated brand strategy to differentiate offers in an increasingly competitive market place. Examples were given in the UK, Iceland and Russia to illustrate different approaches to brand profile development.

The UK market post recession has overcapacity and illustrates the vital requirement to clearly differentiate your offer from the competition. Multi-channel development gives the consumer immediate wide choice and ability to compare opinions and prices. The need for an inspiring brand and commercially stable strategy was emphasised and a checklist of components and issues to be addressed was presented.

Defining why your image and reputation would be positively differentiated from competitors through your vision, values and ethos and the tangible and emotional attributes of your company and offer is difficult. Does your vision inspire staff, management and investors? Can you ensure every potential interaction with your operation will effectively contribute to a positive perception of the organisation as a retailer brand you can trust and a first choice solutions provider?

The function and scope of a typical Brand Strategy should inspire, direct and engage vested interests and stakeholders, manage external audiences and reflect latest ethical and sustainability practices and policies. This is particularly tough in a converging market where food and fashion retailers are moving into home offers, specialist are widening their ranges and department together with furniture stores are developing their home and lifestyle offers. Issues of credibility and reputation then become key issues. “What are you known for?” is a classic differentiation test.

Surprisingly, despite these pressures, DIY chains still needing to address basic issues which have not changed in the last ten years – appealing to women, selling ‘soft‘ home décor convincingly as well as ‘hard’ diy, providing inspiration and information and making stores easy to navigate and a pleasure to visit. Ten years ago SCG London spent a year working with B&Q developing a new smaller flexible convenience format which would be rolled out as a conversion of the superstores which were starting to be cannibalised by the large format ‘warehouses’. It was specifically targeted at women as research had shown B&Q failing significantly to address this key group. Whilst successfully prototyped, management changes meant the project was discontinued. This was ironic as its layout concept, careful zoning, less intimidating merchandising and distinctive point of sale strategy was ahead of its time and highly relevant today.

Husasmidjan, Iceland’s largest DIY chain realised they needed a sophisticated semi-department store approach to their décor, living, kitchen and bathroom offer but combined with a traditional DIY offer for tradesmen. With careful zoning and merchandising and graphic treatments we were able to create a contemporary flexible environment and brand personality to meet these diverse audiences aspirations.

Two contrasting Russian companies were then reviewed to show how a city décor specialist Starik Hottabych and a massive hypermarket operation Tvoi Dom could achieve more relevant and effective brand experience. Starik is an example of creating a new contemporary offer but clearly based on the well know heritage brand equity. This now attracts a younger profile customer as intended but retained its existing customer base. Tvoi Dom’s biggest issue is breaking down a massive offer into easily navigated zones and clear point of sale with a new brand identity, graphic communication and marketing strategy.

The concluding viewpoint of the presentation was the opportunity of Russian DIY operations to use their local knowledge of customer needs and different more flexible format operations and opportunities to create concepts which are highly relevant to the local customer aspirations. The international operations currently are not so flexible in their offer and formats. Russian companies should therefore leverage their local credentials and advantages. The opportunity is to achieve positive community interaction and develop a distinctive brand profile and real differentiation, offering relevant accessible products and services which can be best tuned to meet local market needs. Maybe its time for less CRM and a bit more RRCC – Real Russian Customer Centricity!

Clive Woodger
May 2011

http://www.scglondon.co.uk/

Russia’s retail sector faces the biggest acquisition in its history. The Russian low price chain Kopeika will be taken over by supermarket chain X5 for around 51 billion rubles (about 1.2 billion Euro). Kopeika is owned by a Russian billionaire and like Magnit and Pjatjorotshka one of the leading retail chains in the country.

X5 is already the market leader in Russia and the acquisition will increase its outlets by 700 to 2,300. The annual turnover will jump to over 8 billion Euros.

Lately, there have been more and more large acquisitions in Russia. Just a few days ago Pepsico bought the Russian producer of juice and dairy products Vimm-Bill-Dann for 3.8 billion USD.

After the economic crisis the still very fragmented retail trade experienced a resounding boom. Purchasing power has increased significantly in Russia in the past year.

X5 – which now buys Kopeika – is part of the consortium Alfa Group, owned by oligarch Michail Fridman and had sales of 8.7 billion USD in 2009. Kopeika came sixth in the retail industry with a turnover of 2 billion USD in 2008.

Kopeika was founded in 1998 in Moscow. At that time it was Russia’s first low-cost brand, and was developed in the style of the German chains Aldi and Lidl. Kopeika is a corporation where 100 percent of the shares are owned by Russian billionaire Nikolai Tsvetkov’s, leader of the bank Uralsib.
The other major retailers in Russia are Magnit (turnover: 5.4 billion USD), Lenta (1.8 billion), O’Key (1.6 billion), Dixy (1.3 billion) and Seventh Continent (1.2 billion).

In addition, many international trade groups have established activities in Russia. These include the German wholesaler Metro Group with about 4.7 billion USD in revenue in 2009, and the world market leader Wal-Mart from the U.S. Wal-Mart was reportedly also interested in taking over Kopeika.

http://www.russia-media.ru

The General Director of Magnit, Sergey Galitsky, will speak at Food Business Russia which takes place at the Hilton Leningradskaya in Moscow on the 3-4 February 2011.

Rusbrand is partnering with BBCG on their consumer driven conference programme starting with Food Business Russia on 3-4 February 2011 at the Hilton Leningradskaya, Moscow. Food Business Russia gives the key players in this fast moving consumer driven sector the essential knowledge they need to drive their businesses forward.

“We are delighted to partner with Rusbrand and feel it is an important step in enabling Russia’s retailers and FMCG brands to build stronger and more constructive relationships with each other. The platform our conferences provide will facilitate problem solving dialogue between retailers and FMCG brands concerning all the issues that these businesses jointly face,” said Dominic Manley of BBCG.

Rusbrand are partnering with BBCG to give their members a more important presence at BBCG’s conferences to enable them to contribute to the conference agendas in parallel with the retailers.

Rusbrand is the Association of Branded Goods Manufacturers in Russia. It is the first large-scale effort in Russia to unite both Russian and international manufacturers to further their interests and serve as the voice of the branded goods industry. To date, 54 companies have joined RusBrand to create an environment of fair and vigorous competition, fostering innovation and guaranteeing maximum value to consumers.

RusBrand in many ways represents a positive new era in the Russian business – a stable, growing, economy where businesses can function in a more principled, open environment. At present RusBrand members have 82 entities operating in Russia.

Their total investment into Russia is more than $ 3.4 billion. RusBrand members have created more than 60,000 new jobs in Russia.

The total annual sales of RusBrand members amount to more than $7 billion.

BBCG produce Retail Business Russia, Russia’s flagship retail congress, Food Business Russia, the number one event for the food industry, the DIY and Household Congress, the Retail Online Forum, Fashion Retail Russia and Fresh Food Russia.

BBCG conferences bring together the chief executives of retail chains from throughout Russia with the heads of FMCG companies and suppliers to the retail sector.

Sergey Galitsky, the General Director of Magnit, one of Russia’s leading retail chains, has joined the strategic supervisory board of Food Business Russia.

The summit takes place at the Hilton Leningradskaya, Moscow, on the 3-4 February 2011.

The Summit is jointly organised by BBCG, AKORT and RosProdSoyuz.

He joins Lev Khasis of X5, Ilya Yakubson of Dixy, Nikolai Vlasenko of Victoria, Oleg Tsarkov of Spar, Maxim Protasov of PomidorProm, Andrei Danilenko of Russfarms, Stephen Schueller of Procter and Gamble, and John Tarre of Kimberly Clarke on the board of the 11th International Food Business Russia Summit.

Krasnodar, October 11, 2010: OJSC Magnit is pleased to announce its unaudited September 2010 results.

During 9M 2010 the Company opened (net) 465 stores. The total store base reached 3,693 stores (3,658 convenience stores and
35 hypermarkets). Preliminary consolidated unaudited net retail revenue (excl. VAT) in 9M 2010 increased by 35.21% in ruble
terms (compared to 9M 2009) and stood at 164,472.34 million rubles. Net retail sales in September 2010 increased by 44.11% vs.
September 2009 and amounted to 19,923.89 million rubles.

Company description:
Based in Krasnodar, in the Southern region of Russia, Open Joint Stock Company Magnit is the holding company for a group of
entities that operate in the retail trade under the Magnit brand. The chain of Magnit stores is one of the leading food retail
networks in Russia. As of September 30, 2010 the chain consisted of 3,658 convenience stores and 35 hypermarkets in 1,156
locations in the Russian Federation.
Approximately two-thirds of the Company’s stores are located in cities with a population of less than 500,000 inhabitants. Most of its
stores are located in the Southern, North-Caucasian, Central and Volga regions. The Company also operates stores in the North-
Western, Urals and Siberian regions.
As of September 30, 2010 the Company operated an in-house logistics system consisting of 10 distribution centers, employing
automated stock replenishment systems and a fleet of 2,262 vehicles.
In accordance with the unaudited IFRS consolidated financial statements for 1H 2010, the Company recorded consolidated
revenue of approximately US$3,448 million and consolidated EBITDA of around US$252 million

On the 9-10 September Russia’s largest annual retail summit took place at the recently opened Radisson Royal, Moscow’s premier hotel, overlooking the river and the White House. The 9th International Summit brought together the leaders of the largest Russian and international retail chains, national and international FMCG companies and the leading suppliers to the retail industry.

Topics covered included strategies for this period of change, new ideas to improve operations and subdue price inflation, green building and the development of new technologies for retail, including new media strategies.

More than 750 owners and top managers of retail chains from more than 40 regions of Russia attended the Summit (Moscow, Saint-Petersburg, to Rostov-on-Don, Ekaterinburg, Nizhniy Novgorod, Krasnodar, Kemerovo, Novokuznetsk, Ulan-Ude, Izhevsk, Samara, Chelyabinsk, Tyumen, Khabarovsk, Togliatti, Moore, Pyatigorsk, Kostroma, Yoshkar-Ola, Yakutsk, Stavropol, Vladikavkaz, Belgorod, Orenburg and others) as well as from West European countries, including Great Britain, Germany, France and the Netherlands, and East European countries, including Belorussia, the Ukraine, Latvia, and from the USA and South Africa.

Top level national and international speakers included:
Dr. Tom Haggai, President IGA
Mike Shearwood, CEO Aurora Fashions (Karen Millen, Coast, Oasis, and Warehouse)
Jacky Gervis, CEO FM Logistics
Siemon Scamell-Katz, Founder TNS
Stephen Schueler, CEO Procter and Gamble Russia
Maxim Nogotkov, President Svyaznoy
Lev Khasis, CEO of X5 Retail Group
Ludovic Holinier, Board Member Auchan Russia,
Andrei Gusev, General Director Rigla,
Stephen Schueler, CEO P&G Russia
Sergey Katsiev, President Megapolis
Vladimir Melnikov, Chairman Gloria Jeans
Dragorad Knezi, Director Ark
Tatiana Akinshin, Director Lo
and over 70 other industry leaders speaking over the two days of the Summit

The Summit’s general partner was Ernst and Young, the official logistics company of the summit was FM Logistics, Pepsico were the official beverage company of the summit whilst Oracle sponsored the Gala Dinner and Retail Grand-Prix and SAP and Kimberly-Clark jointly supported the Retail New Wave Competition.

Other sponsors included IBM, Visa, Philips, Raven Russia, TNS, Ark Scholz and Friends, Bumbo, Wincor Nixdorf, Avtoforum, ASB Rating, Columbus IT and Scan City.

The Summit opened with a press briefing by key speakers focussing on “the effects of current price inflation on B2B and B2C markets. Ideas for reducing the consequences for the industry and the consumer”.
Participants of the press briefing included:
Lev Khasis, CEO of X5 Retail Group,
Ludovik Holinier, Board Member of Auchan Russia,
Valerie Movchan, Deputy Chairman of the Agroindustrial Union of Russia,
Ilya Yakubson, President of Dixy, Eugene Fedorov, Chairman of the State Committee for Economic Policy,
Victor Zvagelskiy, Chairman of the Subcommittee For Government Control of the Retail Sector,
Maxim Protasov, Chairman of the Board of Directors of Pomidoprom and President of the Association of Suppliers and Producers of Food Goods.

Questions from the media came from Reuters, Vedomosti, Kommersant, RBK News, RBK TV, Expert, Prime-Tass, Business Journal, RIA News, GZT, Retail.ru, slon.ru, Silver Rain and the Voice of Russia radio stations, finam.ru

The opening session for the Summit concerned “Strategies for the Period of Change, The Dynamics of Key Markets and the Priorities of Leading Companies”
Particpants of this session included:
Alan McClay, Vice President of the Consumer Goods Forum
Lev Khasis, CEO of X5 Retail Group
Ludovic Holinier, Board Member of Auchan Russia,
Sergey Katsiev, President Megapolis
Andrei Gusev, General Director of Rigla,
Stephen Schueler, CEO P&G Russia
Vladimir Melnikov, Chairman Gloria Jeans
Maxim Nogotkov, President, Svyaznoy
Evgeny Butman, CEO ECS GROUP
Valerie Movchan, Deputy Chairman of the Agroindustrial Union of Russia,
Anton Andreev, Vice President Eldorado

The session was moderated by Alexey Filatov, MD of BBCG, and Dmitry Khalilov, Partner Ernst and Young.

The main conclusions from the session were that the retail sector is no longer fundamentally threatened by the past weakness in sales. The reduction in costs that have been achieved and the restored consumer demand means that businesses will now start to reinvest in new technologies. There is a positive sales trend in all sectors of the market currently. The significant price inflation of August in several food products will not have a negative effect on consumer confidence.

The importance of Green Building techniques were also discussed at the Summit in the second session. These techniques, now common in international markets, are gaining ground in Russia. The session brought to light how green building methods can significantly lower costs, benefit the environment, win the loyalty of consumers and increase efficiency. Ilya Yakubson, President of Dixy, chaired the session and speakers included Mattias Andreassen, Head of Property Management at Ikea Russia, Crispin Burridge, Head of Plan A and Sustainable Construction for Marks and Spencer, Jurgen Koch, CEO 4GreenArchitecture and Bernaut Rum, End User Manager Philips Lighting.

Break out sessions included a presentation of ground breaking shopper research by the founder of TNS, Siemon Scamell-Katz, ideas from top retail consultant Andrei Kalmykhov, CEO Trade Help, and a supply chain management session presented by Andrei Khlust of Ernst and Young.

During the evening of the first day the Gala Dinner and Oracle Retail Grand-Prix took place on the River Palace on the Moscow River. The evening was hosted by Ilya Belonovsky, MD of AKORT, and Alena Borodina, Presenter for Russian Radio

Coca-Cola won best promotional campaign of the year.
Euroset won the best advertising campaign of the year.
Best Food Product was won by Makfa Macaronis.
Best Fresh Food Product was won by Wimm Bill Dann with its brand “Domik V Deryevne”.
Best Beverage was won by Pepsico for their “Aqua Mineral Active”.
Best Associated Product was won by Gillette of Procter and Gamble.
Best Electronic Product was won by the Iphone by Apple.
Best Technological Innovation was won by the Rainbow self service system based on Fujitsu technology.
Best Retail Software was won by SAP.
Best Employer of the Year was won by X5 Retail Group.

Other sessions covered Fashion, DIY, Retail On-line, the Federal Law on Trade, Multichannel Strategies, Logistics, IT, Mergers and Acquisitions and almost every important aspect of the retail industry in Russia today.

Focus sessions also became a key part of this year’s event with Lev Khasis presenting in the main conference hall to a full audience and set out the platform for growth for X5 and Milos Ryba of Planet Retail presenting a focus session on the key trends for European retailers.

Retail New Wave, our ground breaking competition to support youth in retail was launched at the Summit by AKORT, MINPROMTORG and BBCG and was supported by SAP and Kimberly-Clark.

4 finalists from the competition were selected to present at the Summit from over 40 entries. The judges finally selected their winning team “Vestrecher” who presented a solution for the use of mobile technology in retail and walked away with their prize of USD10,000 in front of a packed conference hall. The competition was widely applauded as being a great way to put student talent in the focus for retailers and higlight retailing as an exciting career for Russia’s students.

BBCG would like to thank all their partners, sponsors and media partners for making Retail Business Russia 2010 such a success.

B2B Conference Group www.b2bcg.ru
www.RetailBusinessRussia.com

For more information please contact:
Dominic Manley
+44207 193 7863
manley@b2bcg.ru

TNS will be presenting their ground breaking neuroscience based reasearch findings publicly for the first time at Retail Business Russia 2010.

A neuroscience world first! This presentation is the first public sharing of research into decision making in-store using fMRI and Eye tracking to understand how shoppers navigate around the store and make purchase decisions. The learnings show the role of the sub conscious in influencing what shoppers buy and the presentation will discuss its impact on store layout, in-store signage, merchandising, promotions and POS. These new learnings challenge how we think about influencing shopper behavior and are a must see for retailers and brands alike.

TNS Retail and Shopper, the world’s best shopper research agency, has over 20 years of experience in over 70 countries in shopper research.

The fifth international DIY and Household Congress 2011, Russia’s leading forum for the DIY industry, will be produced in association with EDRA, the European DIY-Retail Association.

This cooperation helps to open up the fast growing Russian DIY market to European DIY retailers and manufacturers.

The DIY and Household Congress will take place at the Hilton Leningradskaya in Moscow on the 26-27th May 2011 and will bring together the chief executives and industry leaders of Russia’s local and international DIY retail chains, the manufacturers and distributors of DIY and home improvement products, and the suppliers to the industry.

“We are delighted to be working with EDRA for our 2011 DIY and Household Congress and feel that our cooperation will help us to raise the quality, yet again, of Russia’s premier DIY forum after this year’s hugely successful event and bring an even greater international participation to the event,” said Dominic Manley of BBCG.

“EDRA is proud to be associated with the DIY and Household Congress 2011 in Russia. I spoke at and attended the Congress earlier this year and was thoroughly impressed by the quality of the organisation, the standard of the speakers and the delegates and the relevant and insightful program,” remarked John Herbert of EDRA.

BBCG, as part of the agreement, will offer a 20% price reduction to EDRA members wishing to participate as delegates at the 2011 Congress.

EDRA (the European DIY-Retail Association), founded in 2002 by BHB and FMB, the German and French Home Centre Retail Associations, now has 24 members from 20 countries operating in 43 countries and became its own independent association on 1st January 2010.

EDRA operates on behalf of its members, the DIY retailers of Europe, through networking, communication and lobbying. EDRA’s most important role is in developing and facilitating unity amongst its members to create a strong voice and representation for the home improvement industry. www.edra-online.org

BBCG is recognized in Russia and internationally as the leading organiser of B2B events in the retail sector. Established in the 1990s BBCG works closely with the Russian Government, the leading trade associations, the business media and our sponsors and delegates.

BBCG produces conferences that address the key issues affecting businesses in Russia today whilst bringing together the leaders of the retail sectors we address. www.russianretailbusiness.com

For more information please contact:

Dominic Manley, BBCG Ltd on +44 (0) 207 193 7863 or manley@b2bcg.ru
John Herbert, EDRA on +49 (0) 221 2587 9588 or info@edra-online.org