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Regulations of work with suppliers

These regulations were adopted to ensure transparence in the company’s work with suppliers. Purchase requirement is the main criterion to include SKU in the goods matrix of the proper format.

I. Including SKU in good matrixes.
 
All retailers are divided into formats, the classification of stores "Euroopt" can be downloaded here.
 
SKU is to be included in a goods matrix of proper formats if according to the results of the latest 2 months’ sales it corresponds to the leadership criterion in its commodity group according to the table below (the results of sales in the small-batch sector of the hyper discount store are not included). The table can be downloaded here.
 
As for nonfoods all stores are divided into 9 product line levels. The table with the structure of nonfood product line levels can be downloaded here.
SKU-leaders are included in a proper matrix instead of SKU-outsiders. New SKU are to be included in matrixes of proper formats only on the ground of testing results. The SKU of all matrixes are to be excluded if their sales are fewer than 240 000 rubles for the latest 2 months. 5 % of the total number of SKU in each commodity group is to be rotated to pass from one format matrix into matrixes of other formats.
Under the sales results of February – March 2011, the following minimal sales level for one SKU is about to correspond to the leadership criterion:
  • To include SKU in all formats – 17 million rubles
  • To include SKU in the formats XXXX + XXX + XX – 10 million rubles
  • To include SKU in the formats XXXX + XXX – 7 million rubles
Besides, SKU can be excluded from all matrixes if there is no price distance, in case of groundless increase in price by a supplier as well as “festive” SKU, for instance Christmas tree decorations.
 
Supply of the SKU included in the matrixes of all formats can be implemented through the company’s distribution centre.
 
II. New SKU testing.
 
Testing is carried out in the hyper discount store (Montazhnikov street, 2) during 4 weeks for a fee, goods are placed on a pallet as well as one facing is placed on “home” shelf. A supplier gets a detailed sales report according to the results of testing.
During the testing period there is common markup at the rate of 24 %. The fee for placing SKU on one pallet is 4 900 000 rubles, on ½ pallet – 2 500 000 rubles. Testing can be registered here.
If the result of sales for 4 weeks is more than 250 000 rubles the SKU is to be included in matrix XXXXX, if it is more than 5 000 000 rubles – in all format matrixes. If the sales of a new SKU are high, the head of purchase department may decide to include it into proper matrixes after 15 days of testing.
The same SKU testing can be repeated not earlier than in 3 months. Testing is provided only for early payment. An invoice is to be paid within 3 working days from the day of issue. Information about all paid tests can be found here.
 
III. Shelf space distribution
 
Shelf space for SKU with good testing results as well as for SKU included in matrixes before is distributed in proportion to sales results for the latest 2 months.
 
SKU shares of one brand are summed up and a brand-leader gets the best shelf in its commodity group (a shelf of category 1). Other brands get shelf space according to the leadership criterion: the bigger the sales are the better the shelf is according to the category. The categories of shelves can be found here.
 
Besides, vertical placing is provided for the following commodity groups:
  • Cereals and legumes
  • Sparkling wines and champagne
  • Vegetable oil, except olive one
If the sales share is less than 1 facing, then it is rounded up to 1, in other cases it’s made according to the rules of rounding.
Planograms are changed within 5 working days from the beginning of a month.
 
A supplier has a right to request sales volume information of his goods and the required volume of sales for goods to be included in other format groups from the group manager by e-mail. The manager is obliged to provide necessary information within 3 working days.
 
IV. Dispute settlement procedure
 
If a supplier is dissatisfied with the work of purchase department, he can address his complaints to the internal check department at bezopasnost@eurotorg.by. It’s necessary to explain the complaint and provide the correspondence with the purchase department. The information is to be considered within 5 working days and a well-reasoned decision is communicated to the supplier by e-mail.
 
If the supplier is not satisfied with the decision of the internal check department he can address his complaint to the company’s shareholders at akcioneram@gmail.com. Decision will be made by the shareholders or their authorized representatives.