AGENDA Industry Clients Growth and efficiency
01 SUPERMARKETS IN CHILE INDUSTRIA
SUPERMARKETS INDUSTRY IN CHILE Supermarkets Sales (in BN USD) and stores growth 12.9 BN USD 15.6 BN USD 28% Is what RETAIL represents of Chile s GDP 1,372 STORES 1,363 STORES 25% Is the weight of the SUPERMARKETS INDUSTRY over retail in Chile 4 Significant Operators Source: INE /Banco Central 2013 2016 Data: 2016 / Average Variation: 2014 to 2016
SUPERMARKETS IN CHILE 65% PENETRATION OF TOTAL INVOICING 120.000 points of sale in the country. % STORES 15 % 2,1 % % ACV (INVOICING) 6 % 15 % 14 % Other Pharmacies 81,8 % 65 % Traditional Supermarkets 1.0 % 2016 2016 Source: Nielsen Master Sample/ Cities with more than 30.000 inhabitants
A HIGHLY COMPETITIVE SHARE M 2 : 9.4% STORES: 62 MARKET SHARE M 2 : 22.9% STORES: 461 SHARE M 2 : 41.9% STORES: 366 Source: Cámara Chilena de Comercio SHARE M 2 : 25.8% STORES: 244
DIGITAL CHALLENGE AND OMNICHANNEL BUSINESS 21% OF CHILEANS Has bought through internet during the last year 8% of them has done it for his/her supermarket shopping. 7 OF EVERY 10 CHILEANS Has mobile internet and 88% of them has an access to Facebook. Internet penetration : 49.2% in 2013 v/s 84.1% in 2016 Source: Estudio Chile 3D. GFK 2017
TWO BRANDS STRATEGY QUALITY AND SERVICE 48 stores CONVENIENCE AND CLOSENESS 195 stores ABC1 C2/C3 DE
02 CLIENTS
CONSUMERS MOST VALUED CHARACTERISTICS 79% Price and promotions 65% Wider selection in general. Comfortable purchase 73% 58% experience. Social Responsibility and Sustainability. (IPSOS Global Trends. El mercurio: economía y negocio. June 2017)
71% Of Chileans have changed their way of spending in order to save. 45% Decreased their attending to events out of home. 43% Reduced their clothing expense. 43% Moved to less expensive brands. 43% Spends less eating our of home. Source: Nielsen Consumer Confidence Study - Q2 17
Promotions activity grows, becoming a sales growth driver at Supermarkets. A CONSUMER THAT LOOKS MORE FOR OFFERS 32% of Chileans purchase under the influence of a promotion or offer. 22% declares being under the influence of a television advertisement. 15% by an internet advertisement. Source: Nielsen a Q2 2017. Estudio Chile 3D. GFK 2017
DIFFERENTIATION AND PRODUCTS CONVENIENCE OWN BRANDS TOTAL: 1.541 Sku TOTAL: 6578 Sku A CONSUMER THAT LOOKS FOR A WIDER SELECTION EXCLUSIVE IMPORTED 65% 43% Of Chileans declares having bought own brand products. declares having moved to less expensive brands. TOTAL: 1600 Sku 120 suppliers 260 brands 24 different origins Source: Internal Analysis
1 67% of individuals prefer brands that make a positive contribution to society. 2 49% of Millennials prefer brands that support social causes. 3 28% of Chileans declares to buy items of brands that care about the Environment. A CONSUMER CONNECTED TO THE SOCIETY S INTERESTS Source: 1 IPSOS Global Trends. El mercurio: economía y negocio. June 2017 / 2 CHILE 3D. GFK 2017 / 3 Estudio Millennials Chilenos. Visión Humana 2017.
PILLARS OF SUSTAINABILITY 23 COMMITMENTS WITH SUSTAINABILITY QUALITY OF LIFE ENVIRONMENTAL INNOVATION SUPPLIERS AWARENESS
+ 8.000 M 2 OF GREEN AREAS Alliance with Fundación Mi Parque. Green points at our stores. + 16 DISTRICTS We adhere to municipal agreements eliminating the use of plastic bags. We care about the quality of life of our clients, collaborators and the community: + 9.000 NIÑOS VISITANDO NUESTROS stores Club Jumbito. + 1.000 ITEMS Alliance with foundations concerned with food restrictions. 1 MONTH OF FOOD Alliance with Aldea SOS.
ACTIVE PROMOTERS OF HEALTHY FOOD Restatement of own manufacturing MMPP products. A wide selection of Free of Products. A CLIENT THAT WISHES TO BE HEALTHIER Fish and Fruit and Vegetables Certifications. Food innocuousness audit. Permanent collaborative work with foundations. 70% of Chileans is interested in a healthy life. 66% considers having a healthy life. Source: CHILE3D 2016. GFK - Internal Analysis Convivir Diabetes Juvenil Creciendo con Alergias
Sports and healthy life promotion through our Alliance with TEAM CHILE.
+ DIGITAL OMNICHANNEL CONSUMER CONSUMER What do they expect when purchasing over internet? 79% lower prices 58% Speedy delivery 21% OF CHILEANS PURCHASES ONLINE 27% 21% ARE MILLENNIALS ARE X GENERATION 48% simple return policies 48% monitoring of the product status Source: CHILE3D 2016. GFK
2017 OMNICHANNELING MILESTONES Iquique 1 We launched our new online store in every regional capital. (Iquique. Antofagasta. Calama. Curicó. Talca. Chillán. Concepción. Valdivia) Antofagasta La Serena Calama Copiapó Nov-2017 2 3 We We increased our Food home delivery coverage from 42% to 68% of the national territory. doubled to 20,400 the SKU Food items in our Online store (88%) El Alba La Dehesa La Florida La Reina Peñalolén El Llano Maipú Viña RM Talca. Curicó y Chillán Valdivia Los Andes Rancagua Concepción Temuco Osorno Puerto Montt New Jumbo.cl page Coverage achieved in Q2 2017 Iquique to Puerto Montt
DEVELOPMENT OF DIFFERENT SERVICES THAT ADAPT TO EVERY NEED PURCHASE AT THE STORE And we send it to your house PURCHASE ONLINE And we send it to you in less than 90 minutes. PURCHASE ONLINE And withdraw in your car PURCHASE ONLINE And withdraw your products at your Jumbo. PURCHASE ONLINE And we send it to your house PURCHASE OVER THE TELEPHONE And we send it to your house
A NEW BUSINESS MODEL Orders We implemented our 90 Minutes On Demand business model, currently operating at 11 districts of MR.
Permanent programs to improve work environment and the safety of our collaborators. Implementation of volunteer activities. Publication of our Diversity and Inclusion Policy. OMMITMENT WITH THE UALITY OF LIFE OF UR COLLABORATORS
03 GROWTH AND EFFICIENCY
ONE YEAR AGO WE ANNOUNCED Self service Service Nuevo New centro de Distribution distribución Center Centrales Productive Productivas Centers Eficiencias Operational en gastos expense de operación efficiency
BAKERY CENTER Coverage: Direct logistics for 170 stores, from IV to IX region. bakar Distribution of 16 pre-cooked refrigerated products. Plant with 4 production lines. 3 shifts x 24 hours.
PASTRIES Process standardization. Products and quality. New developments. Products Branding. Coverage: From IV to region. Santa Isabel: 165 stores. Jumbo: 37 stores. Products: Santa Isabel: Cakes and pastry. Jumbo: Basic cakes (Cream). 27
MEAT CENTRAL Simplifying and eliminating processes in the room. Ensuring product innocuousness and availability. Products Development. Branding and labeling. Coverage: From Arica to Puerto Montt (I-X region). Santa Isabel: 195 stores. Jumbo: 49 stores. Products: Santa Isabel: Ground, chopped meat and steak. Jumbo: Ground, chopped meat, steak and portioned fatless pieces.
VESPUCIO DISTRIBUTION CENTER Fruit, Greens, meat and fresh products. Temperatures 0 C, 6 C and 12 C in the different chambers. Built Area: 30,421 m 2 Sorter maximum flow: 90,000 boxes/day
2017 CENTRALIZED NEGOTIATIONS Taking advantage of being a part of Cencosud synergies 78 Processes performed -12% Decrease of expenses made 4.8 MM USD
ENERGY EFFICIENCY ENERGY MANAGEMENT PILLARS OF OUR ENERGY EFFICIENCY CHANGE OF TECHNOLOGY RATE DECREASED ENERGY CONSUMPTION FROM 2013 TO DATE
STORE PLAN LOW PROFITABILITY Value Review proposal focused on client: PROCESSES STRUCTURE SELECTION LAY OUT Nº of stores - 47 % 0 % 2015 2016 2017January - June LOSS DECREASE - 50 % - 21 % 2015 2016 2017January - June
2017 Installed capacity 12 stores 15 stores