Regional products People in today's society are more aware of the advantages of sourcing directly from producers in Romania. Having the right supplier is essential to the success of our business. There are many benefits to choosing to source our products regionally, using our four intermediary logistics centers to distribute goods to all our stores. This type of sourcing reduces our carbon footprint and fuel emissions. Partnerships with our suppliers are reliable. Periodically, we visit where our products are manufactured and shipped, which means that we have greater control over development and quality. Today, consumers are increasingly interested in buying foods that carry labels such as "locally produced" or "regionally produced". In the absence of official definitions of what 'regional' and 'local' mean, the widespread use of these labels in the food sector can be confusing and could be misleading for consumers. Every day, we choose to work with those suppliers who understand our profile and values. We aim to develop partnerships and good relationships with suppliers who are tax registered in Romania. We call them local suppliers*. In addition to the availability of goods produced at any time and in any quantity on a global scale, we are currently facing the opposite trend in the consumer goods industry. Regional and local products are becoming increasingly popular amongmodern consumers. Consumers have become more critical, they ask themselves exactly what product ends up in their shopping bags, and nutrition and health issues have become * local supplier = an organization or person supplying a product or service to the reporting organization and based in the same geographical market as the reporting organization (in the case of PENNY, local, in relation to the supplier, is the equivalent of the geographical market – Romania; tax registration of suppliers considered local must be done by the Romanian National Trade Registry Office). Local suppliers – from Romania 2021 2022 PROGRESS 2022 vs. 2021 Total number of local suppliers – from Romania (no.) 589 631 +5.52% Percentage of local suppliers – from Romania (%) 86.42 87.03 +0.71% Proportion of spending on local suppliers – from Romania (%) 86.12 87.91 +2.08% Daniel COSTACHE Head of Food & Fresh Buying Department increasingly conscious recently. Regionality is an important factor for sustainability and transparency: short transport routes and knowledge of growing and processing areas create authenticity and trust. A regional product is defined as a finished product within the same specifically defined region where the goods from which it is made are produced. In the case of PENNY, a regional product is a product made in Romania. Local products are defined as products grown or produced within a 100 km radius of the point of sale; the products come mostly from small suppliers or agricultural traders who directly supply a limited number of markets at the regional level. At PENNY, we call local products those that meet the above definition, and that are delivered by suppliers directly to PENNY stores without transiting our logistics centers. CORPORATE GOVERNANCE AND BUSINESS SUSTAINABLE ASSORTMENT ENERGY, CLIMATE AND RESOURCES EMPLOYEES AND SOCIETY REPORT ASSURANCE GRI & SASB INDEX
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