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square meters of space. ? Increasing spending power (US$1,041 annual ine): In Moscow and St. Petersburg, the average spending power reaches levels pa rable to or greater than those of Poland, the Czech Republic and Hungary. ? Economic and political reforms: Russia is now officially recognized as a market economy by the United States and European Union. Retailers are quickly capturing market share in cities other than Moscow, which has 12 million inhabitants, but they are also strengthening their existing positions. Auchan, after opening its first hypermarket in Moscow in August 20xx, is now planning to open in St. Petersburg. Its strategy is to achieve an aver age transaction of US$20 in its stores by pricing 10 percent below other retailers in the city. Metro, operating under the Real label in Russia, opened in St. Petersburg and is now investing US$900 million to open 20 hypermarkets in and around Moscow over the next three years. Other retailers are considering different strategies. Local experts believe that Casino might be planning to enter via acquisition. WalMart, Figure 3: Most attractive developing regions for retail “ ” “ ” (20xx versus 20xx) 45% 40% 40% 35% 30% 25% 20% 15% 10% 5% 0% 30% 30% 35% 20% 5% 15% 20% 20xx 20xx 5% 0% Eastern Europe Source: . Kearney Asia Americas . . Mediterranean Africa Emerging Market Priorities for Food Retailers which sent a delegation to Russia in June and December 20xx to check out the possibilities, might also be interested in taking a 75 percent stake in the Petrovsky business, which has 31 outlets in Russia. AVA entered anically under the Marktkauf brand in February 20xx. Of course, foreign retailers still face many issues in Russia. Metro and Auchan have been accused of unfair petition by local retailers, although selling below cost is not (yet) pro hibited in Russia. In addition, 40 percent of Russian retail sales are generated in gray mar kets—a solid improvement over the 70 percent generated in the 1990s, but still high. The local product supply infrastructure remains poor, and product availability is limited. The Slovak Republic ranks second on the GRDI, unchanged since last year. Its high score in the time pressure category (100) reflects a market that is unexploited by international retailers, and where GDP growth is more than 4 percent. In addition, the few foreign retailers that are in the Slovak Republic have limited market coverage. Germany’s Rewe has the 80 70 Hong Kong Figure 4: . Kearney GRDI ranking, 20xx Slovenia Hungary On the radar screen To consider To avoid 60 Poland Israel Czech Repubic Taiwan Mexico South Korea Malaysia Latvia Thailand Chile China Slovak Republic 50 Average = 54 South Africa Tunisia Philippines Bulgaria Morocco Egypt India Russia Romania Vietnam Turkey 40 30 20 Food, drink and tobacco retail sales in US$ billion, excluding tax for 20xx 30 Colombia Indonesia Venezuela Average = 34 40 Ukraine 50 Source: . Kearney Modern retail area per 1,000 inhabitants, number of international retailers in the country, GDP/retail five years CAGR (0 = high saturation。 What Do They Think? 52 percent cited the entry model, and 37 percent listed critical size (see fig ure). Timing and flexibility were the factors mentioned as least important for success. Seventy percent of respon dents agreed that breaking even takes 12 to 18 months and reaching a positive return on investment (ROI) takes four to six years. Figure: Summary of interview findings Using those criteria, 70 percent of respondents acknowledged that preliminary financial targets when entering a new market had to be revised downwards within the first year. Finally, 80 percent of respondents agreed that fast expan sion into a new market was the best approach. 100% 80% 60% 40% 20% 0% 80% 20% 0% 100% 80% 60% 40% 20% 0% ? ? 70% 20% 10% Fast expansion Slow expansion Wait and see Less than 12 12 to 18 More than 18 100% 80% 60% 40% 20% 0% 70% 20% 10% Adapted concept Entry model Critical size Real estate Human resources Innovation Readiness Key perfomance indicators Branding Competitive knowledge Less than 4 Source: . Kearney 4 to 5 5 to 10 . . Timing Flexibility 0% 20% 40% 60% 80% 100% Emerging Market Priorities for Food Retailers sale of its Jumbo hypermarkets to Ahold. Edeka (EDelikatesen and EDiscount) might also withdraw. : With three billion consumers and some of the most populous countries in the world, Asia remains an attractive region for 20xx. Ahold has withdrawn from the region, leaving retail opportunities up for grabs. China, with billion people, GDP growth of 10 percent, and a nearly 13 percent per year increase in retail space, continues to attract global retailers. But the window of opportunity is closing fast. C