Grocery business

The Company operates on the Belarusian retail market, one of the fastest-growing retail markets in Europe, with strong fundamentals for further robust growth. The main engine for growth is modern retail formats, which are increasing market share and displacing traditional retail formats. Sales in modern retail format stores are expected to grow at a CAGR of 15% between 2017 and 2022 – the highest rate in Europe.

The growth potential of modern format retail is underpinned by a low level of penetration compared to other markets. The the share of modern format retail sales in Belarus in 2019 (49%) is comparable to Poland 13 years ago.

Eurotorg is the undisputed leader in the Belarus grocery retail market, with market share in 2019 of approximately 19% of the overall food retail market. In the modern format grocery retail market, the Group’s 2019 market share was approximately 38%, approximately 5 times larger than the second player (unprecedent level in the global context) and higher than the combined market share of the next five competitors. Eurotorg has also built up an enormous gap by geographic coverage, covering approximately 190 localities without any modern retail competitors.

Eurotorg operates a multi-format chain: from convenience stores to hypermarkets. Since 2017 Eurotorg has been focusing on developing smaller formats which is currently the key format for the Company. Convenience-format stores accounted for 53% of total offline sales in 3Q 2020.

Format Main banner Avg selling space, sqm Location % of net retail sales
Rural convenience
| Minimarket
65 Rural settlements with population of <2 ths. people 3%
Urban convenience
| Market
221 Urban settlements/cities, within walking distance for target customers 50%
| Super
889 Densely populated city districts 23%
| Hyper
2,880 Close to transport routes in urban settlements with population of >50 ths. people 24%
As of 30.09.2020 or in 3Q 2020

This diversified multi-format chain model enables the Group to meet the different consumption needs of its customers, from daily neighbourhood to basket family shopping, and to penetrate any particular location in Belarus based on the size of the local population and potential customer base. The Group has a strong position across all formats and all types of localities in Belarus, with more sizeable gap vs the second player in smaller formats and in smaller cities.

The Company’s strategy, based on offering a focused assortment of high turnover products at market-leading prices, delivers a value proposition that is well-tuned to the needs of Belarusian consumers. Eurotorg’s focus on value enhancement for customers enables the Company to achieve an outstanding level of loyalty (2.5 mn active loyalty cards in December 2019) and become the store of choice for 43% of Belarusians, according to BCG.

The in-store shopping experience is enhanced by unmatched marketing campaigns, such as the nationwide lottery “Udacha v pridachu” and the Bonsticks collectible toys marketing campaign. These marketing campaigns complement Eurotorg’s product offering with emotional elements. Since the launch of “Udacha v pridachu”, over 2 million unique customers (or more than 20% of the population of Belarus) have participated in the lottery draws.