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GHS 2015/2016 Consolidation Proposal- Turkey

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New 2015/2016 Budget with 1 Dotcom Store in Izmir

Assumptions:

1. The Dotcom Trial in Izmir will be served from only Bornova Forum

2. New sales budget will be 95% of current Izmir sales 3. Sales should be supported by deliverables to improve

Capacity/ , Efficiency and Quality4. The Seasonal Sales numbers of 3 million have been taken

off from the budget5. The catchment has been optimized as shown in the next

slide. Areas in Red will be excluded from Catchment. Impact to sales will be 5%

6. Marketing cost has been decreased by 37.5% 7. Retail Payroll has decreased from 2.13 MTL to 1.4 MTL8. Store Expenses has decreased from 843 KTL to 356 KTL 9. The 1762 KTL Head Office Cost (IT) consists of

• 632 KTL UK GHS IT Licence Fees • 1130 KTL Regional IT Dotcom recharges

10. Payroll Head count has decreased• 3 Dotcom Chiefs 1 Dotcom chief• 6 Team Leads 2 Team Leads• 39 CDA's 33 CDA's( Assumption of 2.5 Drop Rate

)• 24 Pickers 14 Pickers ( Assumption of 120 Pick

rate for 6 Hours)11. Forum Store Space & Capacity will be aligned to the new

requirement12. New Final HO cost has been update against restructure

***New Option includes new HO cost and stretches sales an extra 10%

Turkey

TRY 'k

New proposed

Budget 2015-16 Stretched Sales (10%)

%

New proposed

Budget 2015-16

%Current Budget

2015-16%

Sales inc VAT 15,778.4 14,344.0 17,486.6Sales Exc VAT 14,344.0 13,040.0 15,737.9

Total Commercial Income 3,586.0 25.0% 3,260.0 25.0% 3,638.0 25.0%

Stock Loss (73.0) -0.5% (73.0) -0.6% (92.0) -0.6%Net Distribution 0.0 0.0% 0.0 0.0% 0.0 0.0%Marketing Loyalty Schemes 0.0 0.0% 0.0 0.0% 0.0 0.0%Marketing Expenses (600.0) -4.2% (600.0) -4.6% (960.0) -6.1%Delivered Gross Income 2,913.0 20.3% 2,587.0 19.8% 2,586.0 16.4%Retail Payroll (1,400.0) -9.8% (1,400.0) -10.7% (2,138.5) -13.6%Store Expenses (Van Costs) (356.0) -2.5% (356.0) -2.7% (843.0) -5.4%Store Expenses (Ex Van Costs) (668.4) -4.7% (668.4) -5.1% (668.4) -4.2%Retail Contribution 488.6 3.4% 162.6 1.2% (1,063.3) -6.8%Property Costs 0.0 0.0% 0.0 0.0% 0.0 0.0%Call Centre Costs 0.0 0.0% 0.0 0.0% 0.0 0.0%Profit Before Central Costs 488.6 3.4% 162.6 1.2% (1,063.3) -6.8%Head Offi ce Costs (Ex IT) (450.0) -3.1% (966.7) -7.4% (966.7) -6.1%Head Offi ce Costs (IT) (1,762.2) -12.3% (1,762.2) -13.5% (1,762.2) -11.2%Other costs 0.0 0.0% 0.0 0.0% 0.0 0.0%Trading Profit Pre Segmentals (1,723.6) -12.0% (2,566.3) -19.7% (3,792.8) -24.1%

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New Catchment For Izmir ( only 5% of trade will be impacted)

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2015/2016 Critical Risks and Deliverables

Deliverables Objective Size Priority Complexity Legal Risk Risk Amount Capex need CostImplementation of the new Trial Model For Izmir (Serve from single Store) Achieve BC of 500KGBP Loss for 2015/2016

XL H M No 0 Minimum TBC

The VAT Legal Project

Eliminate Fiscal Requirement Print Invoice for all customers Enable payment at door devices Fix 800TL above payment failure

M H H Yes 99KTLCurrent Year

budget19KGBP

(PO raised)

The licensing at door and distance selling strategy

Align current solution to Licensing at door Fix Guide price Transparancy Develop fix price for regualtion Apply Distance selling rules for the website

M H H Yes 5% of Revenue Minimum TBC

Brandbank Local modelling and comercilization

Cancel 120 KGBP Annual Comercial Spend Revenue generation for 220 KGBP Mittigate risk for penalty for misleading product display/information

L H M Yesfrom 55 KTL upto

550KTL0 0

Comercial Income Define portfolio for revenue genration To Generate Income from suppliers

M H M No120KGBP

Comercial Spend0 0

Cancel the current 6 Van OrdersAim is to cancel the orders however this is not being accepted by suplliers Accept the Van's for extra orders and

M M M No 0 Yes 449 KTL

GHS – Country Business Plan - TURKEY

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The vision of Grocery Home Shopping is to improve our headline customer measures, grow sales, population coverage, loyalty by serving our customers with a premium service

HouseholdPenetration 0,373 %

Finance

Visio

nEn

able

rs

Group Digital Product

Capability - people plan

Overall Satisfaction95%

Perfect Order27% p1 to 31 % p12

Delivery On Time99%

Stores:

1

Capacity1. Improve time at door2. Use zoning for slot efficiency 4-CDA/ Van performance tracking

Perfect Order1. Regular audit of CDA’s 2. Picker training for produce and fresh3. Improve substitution and customer preference process

Marketing1. Digital remarketing2. Online club card, voucher & coupons3-Complex promotion4. Business to business marketing

Proposition1. Digital remarketing 2. Fix price3-Picker note / substitution

Deliv

erab

les

Ambi

tion

Pilla

rs &

Pr

ioriti

es

Click and Collect: 0

Population Coverage:

1,300,000 +

Zones:

4 +Capacity

Increase: 67 %Utilization :

80%

LFL growth Achieve household penetration growth within already

covered areas

New growth Extend GHS service to new locations and achieve growth in

population coverage

Important Deliverables to Achieve Capacity/ Efficiency and Quality

Initiative Description Customer will say… Owner Financial Costs KPI's Timing Key Dependency

Improve time at door Review the current process for any

opportunities and define best practice for the process that will improve time at door

The staff are great and services premium, lean and simple Emine Operational

Improvement

10 min time at door

Helpfulness driver 97% , on time 99%

Period 3Oracle Van Scheduling

performance and enhancement

Use zoning for slot efficiency Enhancing the dynamic slot capability by moving low penetration areas to zones to

increase our slot capacityI can always find the slot for my

order Yusuf Operational Improvement

Petrol cost per particular catchment

order decrease 20%

Slot per van increase 7%

Period 3Oracle Van Scheduling zone capability works

correctly

CDA / Van performance trackingImplement Microlise van tracking solution in coordination with OMS and ORVS to have the right reporting and performance for CDAs and

VansI get my order on time Emine Capex 15 K GBP

ON time 99%90% CDA ragging is

greenKPIs

10% decrease fuel

consumptionCost per order decrease 20%

Period 6Microlise to be enabled as a supplier in Turkey all vans are fitted with

Microlise solution

Personalized pre-delivery notifications

Notifying customers of substitutions, delivery times, missing items, name of driver via text,

email and appCustomers are able to check the location of

their driver

I don’t feel anxious about my order as I always know if my driver will

deliver late or early and if any changes have been made to my

order

Yusuf Operational Improvement

Notification delay will

improve 100%Period 8 IT

Fix Endeca Search Current Endeca Search is not working

properly. This needs to be fixed for a perfect customer experience and improve basket

I can always find what I look for Yusuf Web UX Improvement

Will improve Basket size Period 3

6

Important Deliverables to Achieve Capacity/ Efficiency and Quality

Initiative Description Customer will say… Owner Financial Costs KPI's Timing Key Dependency

Complex promotionComplex Promotions capability offering

customers in store promotions(Phase 1: Buy X get why, multi buy)

I can see and buy in store promotions online Yusuf

Improve marketing capability IT

Development5% increase of

sales Period 2 IT

Extending our Online range and improving our margin

Extend our online range to have the best offer for our customers to allow them stand more

with Kipa Kapımda

I can find what I want. I can see best information and promotions

in the Kipa Kapimda website.Ebru Improve commercial

capabilityIncrease

basket size with 5%

Period 1-5 GM Strategy

Commercial Income

Do the best advertising agreement - cooperating with Revenue Generation

department.To gain extra income with marketing

channels.

I can see best information and promotions in the Kipa Kapimda

website.Yusuf

Commercial income capability improve

and improve margin500 K TL EOY Revenue Generation

Business to business marketingBuild a capability that build direct relation

with businesses with the best kipa kapimda offers(Customer portfolio management)

Kipa kapimda deals with me personally and has the best offer

for my needYusuf

Percentage of business

customers will increase 100%

Period 3

Full club card integrationEnabled Club Card voucher, e-coupon auto

enrollment, double points capabilities online for grocery home shopping

I can get Club Card benefits online and feel loyal to grocery home

shoppingYusuf Group IT

development

100% club card penetration, vouchers and coupons can be redeemed from website

Period 6 IT Release

Picker note / substitution Introduce online capability to allow customer to define special needs and preference subs

I can decide what I will get from my order Yusuf Group IT

development

Customer can start to use

new functionality

Period 2 IT Release

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Perfect Order - What is important

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Helpfulness of Driver Quality & Freshness

• Picker retraining for produce and fresh• Picker notes / Substitution• Back stock for consignment produce• Work with Commercial to improve consignment• Include quality problems in daily store reviews• Give it free: for some produce

Delivery On Time

• Define the clear KPI’s end to end delivery steps and durations

• Track performance against KPI’s• Coupon for late deliveries• Include also SMS to calls to inform delays

Availability

• Store before picking (night replenishment)• Store improves gap scan quality and positive stock

replenishment• Manage range daily online for availability• Standardize and improve substitution• Manage safety back stock for fresh and produce• Customer Recommended Substitution• Picker notes / Substitution

• Improving the recruitment process for CDA with operation

• CDA refreshments training• Continuous audit of CDA trainer and take

action for opportunities• Decreasing or transparency price changes at

the door• Right process that updates CDA’s with

important trade/promotion information