Consumer Foodservice in Ukraine

Consumer Foodservice in Ukraine

Report Summary Ukrainian CFS environment still experiences consequences of recession Consumer foodservice in Ukraine posted slight growth in value sales in 2010. However, this was mainly related to unit price growth due to inflation and overall food price increases. The number of outlets, together with the number of transactions, declined. Generally, unprofitable and luxury full-service restaurants kept closing, being replaced by more moderately-priced foodservice establishments. The total number of outlets decreased slightly due to the on-going opening of chained fast food outlets and street stalls/kiosks, which appeal more to consumers in the post-crisis environment.

Limited incomes make consumers choosy Consumer behaviour in 2010 found a new trend in addition to the existing inclination to trade down. In 2009 Ukrainians reduced their propensity to go out, as well as their expenditure in bars and restaurants. Consumer foodservice players in turn tried to use all possible options to attract the remaining customers. The majority tried to keep prices as low as possible despite currency devaluation and strong inflation, at the expense of food quality or profit margin. Therefore, by 2010 consumers could already choose from affordable outlets offering better service and food quality.

Fast food keeps on flourishing Fast food demonstrated the greatest resistance to the economic recession in the consumer foodservice environment. Over 2009-2010 the category saw even better dynamics than in the precrisis period. This was due to the influx of a certain proportion of consumers to fast food from fullservice restaurants. With decreased incomes consumers of premium restaurants shifted to lower-price foodservice outlets from 2009. This trend became even more evident in 2010.

Chains steadily erode share of independents Though the majority of consumer foodservice operators remained independent in 2010, their number declined. In contrast, chained outlets increased in number. Chained outlets also faced positive results in current value sales while independent foodservice establishments experienced a decline. Ukrainian chained operators are traditionally more active in fast food (Pizza Celentano, McDonald’s, Yaponakhata, Burger Club, etc) and street stalls/kiosks (Fornetti, Namynaiko, Chudo-Pich, Star Dogs).

The majority of chained brands in 2010 were represented by owned as well as franchised outlets.

Consumer Foodservice is looking forward to Euro-2012 Even more than for economic recovery, consumer foodservice players anchor their hopes in the UEFA Euro 2012 football tournament to be held in Poland and Ukraine. It will be held in a few of the largest cities in Ukraine (Kyiv, Kharkiv, Donetsk, Lviv), and are expected to attract a lot of foreign among fans and tourists. Those in their turn will spend money in Ukraine consumer foodservice market. Although

Ukrainian consumers will not be able to return to their pre-crisis eating-out habits, it is likely that foreign visitors will provide a positive contribution to the Ukrainian consumer foodservice environment. The most important consumers for full-service restaurants in 2010 were Russian businessmen. These likely to remain target customers over the forecast period. The main reason for this is the high spending power of Russian businessmen, who patronise the most expensive restaurants of Ukraine.

TABLE OF CONTENTS Consumer Foodservice in Ukraine - Industry Overview EXECUTIVE SUMMARY Ukrainian CFS environment still experiences consequences of recession Limited incomes make consumers choosy Fast food keeps on flourishing Chains steadily erode share of independents Consumer Foodservice is looking forward to Euro-2012 KEY TRENDS AND DEVELOPMENTS The slight signs of recovery are seen in Ukrainian consumer foodservice New consumer habits appear in consumer foodservice Franchising gains popularity Fast-paced lifestyles dominate healthy aspirations Chained foodservice gains share MARKET DATA Table 1 Units, Transactions and Value Sales in Consumer Foodservice: 2005-2010 Table 2 Units, Transactions and Value Sales in Consumer Foodservice: % Growth 2005-2010 Table 3 Consumer Foodservice by Independent Vs Chained Outlets: Units/Outlets 2010 Table 4 Consumer Foodservice by Eat in Vs Takeaway 2010 Table 5 Consumer Foodservice by Food Vs Drinks Split 2010 Table 6 Sales in Consumer Foodservice by Location 2005-2010 Table 7 Leading Chained Consumer Foodservice Brands by Number of Units 2010 Table 8 Chained Consumer Foodservice Company Shares 2006-2010 Table 9 Chained Consumer Foodservice Brand Shares 2007-2010 Table 10 Forecast Units, Transactions and Value Sales in Consumer Foodservice: 2010-2015 Table 11 Forecast Units, Transactions and Value Sales in Consumer Foodservice: % Growth 2010-2015 APPENDIX Table 12 Consumer Expenditure on Consumer Foodservice 2005-2010 OPERATING ENVIRONMENT Franchising DEFINITIONS Summary 1 Research Sources Consumer Foodservice in Ukraine - Company Profiles FFS-co in Consumer Foodservice (Ukraine) STRATEGIC DIRECTION KEY FACTS

COMPANY BACKGROUND SUPPLIERS COMPETITIVE POSITIONING Summary 3 FFS-co: Competitive Position 2010 Khlibprom Concern VAT in Consumer Foodservice (Ukraine) STRATEGIC DIRECTION KEY FACTS COMPANY BACKGROUND SUPPLIERS COMPETITIVE POSITIONING Summary 6 Concern Khlibprom VAT: Competitive Position 2010 Kozyrna Karta Merezha TOV in Consumer Foodservice (Ukraine) STRATEGIC DIRECTION KEY FACTS COMPANY BACKGROUND SUPPLIERS COMPETITIVE POSITIONING Summary 9 Kozyrna Karta Merezha TOV: Competitive Position 2010 Omex Corp in Consumer Foodservice (Ukraine) STRATEGIC DIRECTION KEY FACTS COMPANY BACKGROUND SUPPLIERS COMPETITIVE POSITIONING Summary 12 Omex Corp: Competitive Position 2010 Svitova Karta Holding Co in Consumer Foodservice (Ukraine) STRATEGIC DIRECTION KEY FACTS COMPANY BACKGROUND SUPPLIERS COMPETITIVE POSITIONING Summary 14 Svitova Karta Holding Co: Competitive Position 2010 100% Home Delivery/Takeaway in Ukraine - Category Analysis HEADLINES TRENDS 100% home delivery/takeaway experienced a decrease in both the number of outlets as well as value sales in 2010. There were a few reasons for this performance. First of all, Ukrainians were still influenced by the economic recession. Therefore, they continued saving money: instead of ordering home delivery, they preferred to buy food in retail outlets and cook it at home. On the other hand, consumers with the money for CFS preferred to go out and have a meal at an eat-in establishment.

Secondly, the offer of 100% home delivery/takeaway was limited to mainly local cuisine and pizza.

Customer service in such type of foodservices was low. This was the reason for consumers to buy

takeaway products from eat-in establishments, which offer a wide variety of courses and takeaway/home delivery options.

COMPETITIVE LANDSCAPE The 100% home delivery/takeaway is highly fragmented. While Domino’s Pizza entered Ukrainian CFS in the middle of 2010, it was still emerging at the end of the review period. Therefore its dynamics will be noticeable only in 2011. The company plans to open 40-50 outlets in Ukraine by 2015.

PROSPECTS 100% home delivery/takeaway is expected to see qualitative development over the forecast period. As competition intensifies in CFS, 100% HDTA will have to struggle for consumers’ attention. The category will feel strong pressure from eat-in restaurants which also offer home delivery services. Moreover, the higher service standards of new global player Domino’s Pizza Ukraine TOV will force other companies to revise their positioning.

CATEGORY DATA Table 13 100% Home Delivery/Takeaway by Category: Units/Outlets 2005-2010 Table 14 100% Home Delivery/Takeaway by Category: Number of Transactions 2005-2010 Table 15 100% Home Delivery/Takeaway by Category: Foodservice Value 2005-2010 Table 16 100% Home Delivery/Takeaway by Category: % Units/Outlets Growth 2005-2010 Table 17 100% Home Delivery/Takeaway by Category: % Transaction Growth 2005-2010 Table 18 100% Home Delivery/Takeaway by Category: % Foodservice Value Growth 2005-2010 Table 19 Global Brand Owner Shares of Chained 100% Home Delivery/Takeaway 2006-2010 Table 20 Brand Shares of Chained 100% Home Delivery/Takeaway 2007-2010 Table 21 Forecast Sales in 100% Home Delivery/Takeaway by Category: Units/Outlets 2010-2015 Table 22 Forecast Sales in 100% Home Delivery/Takeaway by Category: Number of Transactions 20102015 Table 23 Forecast Sales in 100% Home Delivery/Takeaway by Category: Foodservice Value 2010-2015 Table 24 Forecast Sales in 100% Home Delivery/Takeaway by Category: % Units/Outlets Growth 20102015 Table 25 Forecast Sales in 100% Home Delivery/Takeaway by Category: % Transaction Growth 20102015 Table 26 Forecast Sales in 100% Home Delivery/Takeaway by Category: % Foodservice Value Growth 2010-2015 Cafés/Bars in Ukraine - Category Analysis HEADLINES TRENDS 2010 uncovered the first signs of recovery from the economic crisis. However, the results of cafés/bars’ performance was still far from pre-crisis levels. Ukrainians started their way back to cafés/bars at a very slow pace, trading down and looking towards special offers and the level of service. Such tough conditions forced a number of independent cafés to close. Chained outlets mainly postponed the extension plans for the better times of the forecast period. Thus, the number of outlets in 2010 decreased by almost 2%.

COMPETITIVE LANDSCAPE The main contribution to sales through cafés/bars was by independent outlets. Although chained

cafés/bars accounted for less than 1% of the total number of outlets and foodservice value sales in 2010, the players were very dynamic.

PROSPECTS Cafés/bars is expected to decrease over the forecast period. The main reason is the outflow of cafés to the other categories of CFS, such as fast food and full-service restaurants. The constant value CAGR is expected to be -2%, amounting to UAH17.3 billion at the end of the forecast period.

CATEGORY DATA Table 27 Cafés/Bars by Category: Units/Outlets 2005-2010 Table 28 Cafés/Bars by Category: Number of Transactions 2005-2010 Table 29 Cafés/Bars by Category: Foodservice Value 2005-2010 Table 30 Cafés/Bars by Category: % Units/Outlets Growth 2005-2010 Table 31 Cafés/Bars by Category: % Transaction Growth 2005-2010 Table 32 Cafés/Bars by Category: % Foodservice Value Growth 2005-2010 Table 33 Global Brand Owner Shares of Chained Cafés/Bars 2006-2010 Table 34 Brand Shares of Chained Cafés/Bars 2007-2010 Table 35 Forecast Sales in Cafés/Bars by Category: Units/Outlets 2010-2015 Table 36 Forecast Sales in Cafés/Bars by Category: Number of Transactions 2010-2015 Table 37 Forecast Sales in Cafés/Bars by Category: Foodservice Value 2010-2015 Table 38 Forecast Sales in Cafés/Bars by Category: % Units/Outlets Growth 2010-2015 Table 39 Forecast Sales in Cafés/Bars by Category: % Transaction Growth 2010-2015 Table 40 Forecast Sales in Cafés/Bars by Category: % Foodservice Value Growth 2010-2015 Consumer Foodservice by Location in Ukraine - Category Analysis HEADLINES TRENDS Though there was little change in the total picture of foodservice locations, choosing the right location priorities in 2010 varied strongly from category to category. Full-service restaurants focused more on quiet areas of the largest cities, while fast food establishments and kiosks preferred crowded streets.

The retail location continued to gain share, as it provides a strong consumer flow. The share held by travel and leisure posted no dynamics, remaining mainly at the level of 2009 due to still visible postcrisis consumer trend to save money.

COMPETITIVE LANDSCAPE The leading non-standalone location over the review period was leisure with almost 20% of current foodservice value sales. However, the relatively new location of retail posted the highest growth rates in terms of the number of outlets as well as value sales. This was caused by the rapid growth of retailing channels and the growing number of CFS establishments within retailers. The travel location holds third position in non-standalone locations, showing little dynamics. However, it is expected to see travel-located outlets among the leaders of value sales over the short-term, boosted by the tourist influx to the Euro 2012 football tournament.

PROSPECTS Consumer foodservice on the whole is expected to see a decline over the forecast period with a constant value CAGR of 2%, with fractional growth in the number of outlets. The positive performance is expected over the short-term, mainly connected with the Euro 2012 football tournament. If the economic situation sees the same slow pace of recovery, the longer term is likely to see a decrease in

all types of CFS, bringing back the figures of 2011. The main expansion is expected to occur in smaller cities and towns, leaving non-profitable locations without attention.

CATEGORY DATA Table 41 Consumer Foodservice Sales by Location: Units/Outlets 2005-2010 Table 42 Consumer Foodservice Sales by Location: Number of Transactions 2005-2010 Table 43 Consumer Foodservice Sales by Location: Foodservice Value 2005-2010 Table 44 Consumer Foodservice Sales by Location: % Units/Outlets Growth 2005-2010 Table 45 Consumer Foodservice Sales by Location: % Transaction Growth 2005-2010 Table 46 Consumer Foodservice Sales by Location: % Foodservice Value Growth 2005-2010 Table 47 Consumer Foodservice Sales through Standalone: Units/Outlets 2005-2010 Table 48 Consumer Foodservice Sales through Standalone: Number of Transactions 2005-2010 Table 49 Consumer Foodservice Sales through Standalone: Foodservice Value 2005-2010 Table 50 Consumer Foodservice Sales through Standalone: % Units/Outlets Growth 2005-2010 Table 51 Consumer Foodservice Sales through Standalone: % Transaction Growth 2005-2010 Table 52 Consumer Foodservice Sales through Standalone: % Foodservice Value Growth 2005-2010 Table 53 Consumer Foodservice Sales through Leisure: Units/Outlets 2005-2010 Table 54 Consumer Foodservice Sales through Leisure: Number of Transactions 2005-2010 Table 55 Consumer Foodservice Sales through Leisure: Foodservice Value 2005-2010 Table 56 Consumer Foodservice Sales through Leisure: % Units/Outlets Growth 2005-2010 Table 57 Consumer Foodservice Sales through Leisure: % Transaction Growth 2005-2010 Table 58 Consumer Foodservice Sales through Leisure: % Foodservice Value Growth 2005-2010 Table 59 Consumer Foodservice Sales through Retail: Units/Outlets 2005-2010 Table 60 Consumer Foodservice Sales through Retail: Number of Transactions 2005-2010 Table 61 Consumer Foodservice Sales through Retail: Foodservice Value 2005-2010 Table 62 Consumer Foodservice Sales through Retail: % Units/Outlets Growth 2005-2010 Table 63 Consumer Foodservice Sales through Retail: % Transaction Growth 2005-2010 Table 64 Consumer Foodservice Sales through Retail: % Foodservice Value Growth 2005-2010 Table 65 Consumer Foodservice Sales through Lodging: Units/Outlets 2005-2010 Table 66 Consumer Foodservice Sales through Lodging: Number of Transactions 2005-2010 Table 67 Consumer Foodservice Sales through Lodging: Foodservice Value 2005-2010 Table 68 Consumer Foodservice Sales through Lodging: % Units/Outlets Growth 2005-2010 Table 69 Consumer Foodservice Sales through Lodging: % Transaction Growth 2005-2010 Table 70 Consumer Foodservice Sales through Lodging: % Foodservice Value Growth 2005-2010 Table 71 Consumer Foodservice Sales through Travel: Units/Outlets 2005-2010 Table 72 Consumer Foodservice Sales through Travel: Number of Transactions 2005-2010 Table 73 Consumer Foodservice Sales through Travel: Foodservice Value 2005-2010 Table 74 Consumer Foodservice Sales through Travel: % Units/Outlets Growth 2005-2010 Table 75 Consumer Foodservice Sales through Travel: % Transaction Growth 2005-2010 Table 76 Consumer Foodservice Sales through Travel: % Foodservice Value Growth 2005-2010 Table 77 Forecast Consumer Foodservice Sales by Location: Units/Outlets 2010-2015 Table 78 Forecast Consumer Foodservice Sales by Location: Number of Transactions 2010-2015 Table 79 Forecast Consumer Foodservice Sales by Location: Foodservice Value 2010-2015 Table 80 Forecast Consumer Foodservice Sales by Location: % Units/Outlets Growth 2010-2015

Table 81 Forecast Consumer Foodservice Sales by Location: % Transaction Growth 2010-2015 Table 82 Forecast Consumer Foodservice Sales by Location: % Foodservice Value Growth 2010-2015 Table 83 Forecast Consumer Foodservice Sales through Standalone: Units/Outlets 2010-2015 Table 84 Forecast Consumer Foodservice Sales through Standalone: Number of Transactions 20102015 Table 85 Forecast Consumer Foodservice Sales through Standalone: Foodservice Value 2010-2015 Table 86 Forecast Consumer Foodservice Sales through Standalone: % Units/Outlets Growth 20102015 Table 87 Forecast Consumer Foodservice Sales through Standalone: % Transaction Growth 2010-2015 Table 88 Forecast Consumer Foodservice Sales through Standalone: % Foodservice Value Growth 20102015 Table 89 Forecast Consumer Foodservice Sales through Leisure: Units/Outlets 2010-2015 Table 90 Forecast Consumer Foodservice Sales through Leisure: Number of Transactions 2010-2015 Table 91 Forecast Consumer Foodservice Sales through Leisure: Foodservice Value 2010-2015 Table 92 Forecast Consumer Foodservice Sales through Leisure: % Units/Outlets Growth 2010-2015 Table 93 Forecast Consumer Foodservice Sales through Leisure: % Transaction Growth 2010-2015 Table 94 Forecast Consumer Foodservice Sales through Leisure: % Foodservice Value Growth 20102015 Table 95 Forecast Consumer Foodservice Sales through Retail: Units/Outlets 2010-2015 Table 96 Forecast Consumer Foodservice Sales through Retail: Number of Transactions 2010-2015 Table 97 Forecast Consumer Foodservice Sales through Retail: Foodservice Value 2010-2015 Table 98 Forecast Consumer Foodservice Sales through Retail: % Units/Outlets Growth 2010-2015 Table 99 Forecast Consumer Foodservice Sales through Retail: % Transaction Growth 2010-2015 Table 100 Forecast Consumer Foodservice Sales through Retail: % Foodservice Value Growth 20102015 Table 101 Forecast Consumer Foodservice Sales through Lodging: Units/Outlets 2010-2015 Table 102 Forecast Consumer Foodservice Sales through Lodging: Number of Transactions 2010-2015 Table 103 Forecast Consumer Foodservice Sales through Lodging: Foodservice Value 2010-2015 Table 104 Forecast Consumer Foodservice Sales through Lodging: % Units/Outlets Growth 2010-2015 Table 105 Forecast Consumer Foodservice Sales through Lodging: % Transaction Growth 2010-2015 Table 106 Forecast Consumer Foodservice Sales through Lodging: % Foodservice Value Growth 20102015 Table 107 Forecast Consumer Foodservice Sales through Travel: Units/Outlets 2010-2015 Table 108 Forecast Consumer Foodservice Sales through Travel: Number of Transactions 2010-2015 Table 109 Forecast Consumer Foodservice Sales through Travel: Foodservice Value 2010-2015 Table 110 Forecast Consumer Foodservice Sales through Travel: % Units/Outlets Growth 2010-2015 Table 111 Forecast Consumer Foodservice Sales through Travel: % Transaction Growth 2010-2015 Table 112 Forecast Consumer Foodservice Sales through Travel: % Foodservice Value Growth 20102015 Fast Food in Ukraine - Category Analysis HEADLINES TRENDS Fast food restaurants led demand in 2009, at the time of strong economic recession. The situation

remained relatively similar in 2010. Most consumers still could not return to full-service restaurants, but sought tasty and various food courses in more moderately-priced fast food outlets. Fast food players offered the most in demand food products for consumers. Asian, burger and pizza fast food restaurants managed to attract the largest audiences in Ukraine in 2010.

COMPETITIVE LANDSCAPE The historical leader in both fast food and in total consumer fast food in 2010 remained McDonald’s Ukraine TOV with 45% of fast food current value sales and 3% of total CFS. The main competitive benefits are high brand recognition, widespread promotional campaigns and high standards of service.

PROSPECTS More fast food restaurants are expected over the forecast, as they provide a wide variety of food at a moderate price. The latter will be the determining factor when choosing a place to eat, as over the short and mid-term forecast consumer purchasing power is likely to remain low. By the end of the forecast period, together with the end of the recession, consumers will switch to full-service restaurants, especially in the evening. Thus, growth will be limited by that time. Moreover, growing concerns regarding healthy food and anti-fast food propaganda will negatively impact on the category’s growth rates.

CATEGORY DATA Table 113 Fast Food by Category: Units/Outlets 2005-2010 Table 114 Fast Food by Category: Number of Transactions 2005-2010 Table 115 Fast Food by Category: Foodservice Value 2005-2010 Table 116 Fast Food by Category: % Units/Outlets Growth 2005-2010 Table 117 Fast Food by Category: % Transaction Growth 2005-2010 Table 118 Fast Food by Category: % Foodservice Value Growth 2005-2010 Table 119 Sales of Bakery Products Fast Food by Type 2007-2010 Table 120 Global Brand Owner Shares of Chained Fast Food 2006-2010 Table 121 Brand Shares of Chained Fast Food 2007-2010 Table 122 Forecast Sales in Fast Food by Category: Units/Outlets 2010-2015 Table 123 Forecast Sales in Fast Food by Category: Number of Transactions 2010-2015 Table 124 Forecast Sales in Fast Food by Category: Foodservice Value 2010-2015 Table 125 Forecast Sales in Fast Food by Category: % Units/Outlets Growth 2010-2015 Table 126 Forecast Sales in Fast Food by Category: % Transaction Growth 2010-2015 Table 127 Forecast Sales in Fast Food by Category: % Foodservice Value Growth 2010-2015 Full-Service Restaurants in Ukraine - Category Analysis HEADLINES TRENDS The category most affected by the economic crisis saw almost no dynamics in 2010. Although there were slight signs of recovery in the Ukrainian economy, consumers were not yet ready to return to fullservice restaurants. Prices remained high if FSR in 2010, as that category of foodservice was unable to save on the quality of food or service (the most valuable selling points). Therefore the number of FSR outlets decreased in 2010: some went bankrupt, while others were rebranded into cheaper fast food formats. For example, Svitova Karta Holding Co opened mid-price fast food establishments instead of elite restaurant Dolche. Chained FSR leader Kozyrna Karta Merezha TOV opened more moderatelypriced outlet Leto-cafe instead of upper-price Pelmennitsa.

COMPETITIVE LANDSCAPE Historical leader in chained FSR, Kozyrna Karta Merezha TOV, with its brands Auto-Grill Myslyvets and Kozachok, led current value sales with a 73% value share in 2010. The company owns different types of restaurants, ranging from low-cost establishments to elite outlets. Auto-Grill Myslyvets was the largest chained FSR player in Ukraine in 2010. It appealed to consumers due to its years of successful activity in Ukraine and high brand recognition, providing good service, a varied menu including grilled courses, and extended working hours.

PROSPECTS It is expected that over the forecast period full-service restaurants overall will see a better performance as the economic situation recovers and consumers’ disposable incomes reach pre-crisis levels. The category is expected to post a constant value CAGR of almost -2%. A negative influence will be exerted from independent outlets, especially newly opened establishments. The main reasons for this are high investments and long payback time, as well as tough competition with well-known restaurants benefitting from good credit.

CATEGORY DATA Table 128 Full-Service Restaurants by Category: Units/Outlets 2005-2010 Table 129 Full-Service Restaurants by Category: Number of Transactions 2005-2010 Table 130 Full-Service Restaurants by Category: Foodservice Value 2005-2010 Table 131 Full-Service Restaurants by Category: % Units/Outlets Growth 2005-2010 Table 132 Full-Service Restaurants by Category: % Transaction Growth 2005-2010 Table 133 Full-Service Restaurants by Category: % Foodservice Value Growth 2005-2010 Table 134 Global Brand Owner Shares of Chained Full-Service Restaurants 2006-2010 Table 135 Brand Shares of Chained Full-Service Restaurants 2007-2010 Table 136 Forecast Sales in Full-Service Restaurants by Category: Units/Outlets 2010-2015 Table 137 Forecast Sales in Full-Service Restaurants by Category: Number of Transactions 2010-2015 Table 138 Forecast Sales in Full-Service Restaurants by Category: Foodservice Value 2010-2015 Table 139 Forecast Sales in Full-Service Restaurants by Category: % Units/Outlets Growth 2010-2015 Table 140 Forecast Sales in Full-Service Restaurants by Category: % Transaction Growth 2010-2015 Table 141 Forecast Sales in Full-Service Restaurants by Category: % Foodservice Value Growth 20102015 Self-Service Cafeterias in Ukraine - Category Analysis HEADLINES TRENDS Self-service cafeterias was the main format of CFS in former Soviet Union countries, including Ukraine.

Afterwards the number of outlets strongly decreased, transforming into cafés, restaurants and other type of consumer foodservice establishment. Over the review period there was also a decline of the number of outlets, determined by the unpopularity of the format and the economic downturn. The main consumers of self-service cafeterias are those on tighter budgets, such as low-income employees and students, looking for cheap lunch alternatives. Therefore, self-service cafeterias was the category most affected by the crisis, as consumers switched to homemade food.

COMPETITIVE LANDSCAPE The chained self-service cafeterias niche was represented by only one player – Puzata Khata TOV, with 39 stores. 87 independent outlets were represented only by local operators.

PROSPECTS The category is expected to see a slight decline in future due to the declining popularity of independent self-service cafeterias. Some will go bankrupt, others may transform into full-service restaurants, fast food establishments or chains (for example, Domashnya Kukhnya with its four outlets in 2010 can expand into a chain over the forecast period).

CATEGORY DATA Table 142 Self-Service Cafeterias: Units/Outlets 2005-2010 Table 143 Self-Service Cafeterias: Number of Transactions 2005-2010 Table 144 Self-Service Cafeterias: Foodservice Value 2005-2010 Table 145 Self-Service Cafeterias: % Units/Outlets Growth 2005-2010 Table 146 Self-Service Cafeterias: % Transaction Growth 2005-2010 Table 147 Self-Service Cafeterias: % Foodservice Value Growth 2005-2010 Table 148 Global Brand Owner Shares of Chained Self-Service Cafeterias 2006-2010 Table 149 Brand Shares of Chained Self-Service Cafeterias 2007-2010 Table 150 Forecast Sales in Self-Service Cafeterias: Units/Outlets 2010-2015 Table 151 Forecast Sales in Self-Service Cafeterias: Number of Transactions 2010-2015 Table 152 Forecast Sales in Self-Service Cafeterias: Foodservice Value 2010-2015 Table 153 Forecast Sales in Self-Service Cafeterias: % Units/Outlets Growth 2010-2015 Table 154 Forecast Sales in Self-Service Cafeterias: % Transaction Growth 2010-2015 Table 155 Forecast Sales in Self-Service Cafeterias: % Foodservice Value Growth 2010-2015 Street Stalls/Kiosks in Ukraine - Category Analysis HEADLINES TRENDS Street stalls/kiosks was one of the most growing categories in 2010 and even overcame the success of 2009. The most important factor contributing to such growth was high demand from consumers with still low incomes. Among the other effects increasing popularity were easy and convenient conditions of entry (low initial investments and well-established and supporting franchising services).

COMPETITIVE LANDSCAPE Fornetti-Ukraine TOV (a local representative of Hungarian Fornetti brand) led current value sales of chained street stalls/kiosks in 2010 with its share of 47%. This was underpinned by a combination of moderate pricing with quite high standards of service for street stalls/kiosks. Khlibprom Concern VAT with Namynaiko followed the leader with a 17% value share. Third place belonged to the brand ChudoPich (Chudo-Pich TOV).

PROSPECTS The total number of street stalls/kiosks is expected to see a CAGR of -5% over the forecast period.

Nevertheless, the trend towards the increase of chained outlets will remain strong. Independent street stalls/kiosks will see a steep further decrease with a -9% CAGR, unable to compete with high quality standards and the strong branding of chains.

CATEGORY DATA Table 156 Street Stalls/Kiosks: Units/Outlets 2005-2010 Table 157 Street Stalls/Kiosks: Number of Transactions 2005-2010 Table 158 Street Stalls/Kiosks: Foodservice Value 2005-2010 Table 159 Street Stalls/Kiosks: % Units/Outlets Growth 2005-2010

Table 160 Street Stalls/Kiosks: % Transaction Growth 2005-2010 Table 161 Street Stalls/Kiosks: % Foodservice Value Growth 2005-2010 Table 162 Global Brand Owner Shares of Chained Street Stalls/Kiosks 2006-2010 Table 163 Brand Shares of Chained Street Stalls/Kiosks 2007-2010 Table 164 Forecast Sales in Street Stalls/Kiosks: Units/Outlets 2010-2015 Table 165 Forecast Sales in Street Stalls/Kiosks: Number of Transactions 2010-2015 Table 166 Forecast Sales in Street Stalls/Kiosks: Foodservice Value 2010-2015 Table 167 Forecast Sales in Street Stalls/Kiosks: % Units/Outlets Growth 2010-2015 Table 168 Forecast Sales in Street Stalls/Kiosks: % Transaction Growth 2010-2015 Table 169 Forecast Sales in Street Stalls/Kiosks: % Foodservice Value Growth 2010-2015

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