Author Archives: CrispConsulting

Magnit overtakes X5

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Magnit overtook sales at its rival X5 Retail Group NV for the first time since the company opened stores 15 years ago.
X5, controlled by billionaire Mikhail Fridman’s Alfa Group, posted an 8.1 percent increase in first-quarter sales to 126 billion rubles ($4.1 billion), it said in a statement. Krasnodar-based Magnit said earlier this week that quarterly sales rose more than 30 percent to 131 billion ruble.
“I’m afraid to be found immodest, but for the first time over the last 15 years after opening of the first store we have become the leader in the food retail sector by sales,” Galitskiy said in a statement.
Since 2008 Magnit has tripled its store network to more than 7,000, building new outlets from scratch in Russia’s regions. In 2011, Magnit exceeded the market value of X5, which had expanded by acquiring rivals including Karousel an Kopeyka.
“In the last two years, X5 has been having problems in digesting its acquisitions and managing stores, which led to customer outflow,” Ivan Kushch, analyst at Moscow-based VTB Capital said by phone. “Magnit was set to overtake it by sales sometime this year.”
Magnit has risen 72 percent in the past 12 months, giving it a market value of $23.7 billion. X5 is worth $4.8 billion after falling 22 percent over the same period.

Source: www.freshplaza.com

10,000 new Magnit stores in 5 years

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Magnit, Russia’s largest food retailer by market value, plans to open almost 10,000 stores in the next five years, or more than five a day on average.
Magnit wants to double the number of convenience stores to 12,000 by the end of 2017, and to quadruple the number of hypermarkets to 500, the Krasnodar, southern Russia-based retailer said.
Magnit has doubled its store network in the last three years, while shares have risen more than 150 percent. Magnit has a market value of about $21 billion in London, exceeding French retailer Carrefour SA’s (CA) $19.5 billion.
Magnit’s long-term targets look aggressive and may require about $12.8 billion of capital spending during the next five years funded by a sale of new shares, Mikhail Terentiev, an analyst at Otkritie Capital, said.
The retailer plans to use cash flow and borrowing in equal proportions to fund growth. Capital spending will be as much as $1.8 billion this year.

Source: www.freshplaza.com

Billa to open 15 stores in Russia

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Rewe Group’s Billa supermarket banner is set for expansion in Russia this year, with plans to add 15 stores to its network.

Janusz Kulik, a board member of Rewe International broke the news, saying, “Russia is one of the priority markets for the group and provides good growth.” He added that the group is in the market for acquisitions but asking prices are high.

Source: www.freshplaza.com

Russia to develop organic sertification standards

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In the past few years, city-dwelling Russians have developed a strong interest in healthier and organic food, according to Emily Balsamo from the Moscow Office of Bord Bia – Irish Food Board. However, presently there is no certification for organic products in Russia. Many products carry the labels “organic” or “bio” without certification.

In 2012, several producers of such products wrote an open letter to the Russian Ministry of Agriculture demanding a certification process.

The Ministry of Agriculture responded with a draft law, “On the production of organic agricultural products and amendments to legislative acts of the Russian Federation,” dated 26 November 2012.

The draft law designates that Russian organic standards will be consistent with EU Organic regulations and the National Organic Program in the United States. However, there is no regulatory body in Russia which is prepared to certify organic products at this time.

Analysts believe that the responsibility of certification will be delegated to the Russian Service for Veterinary and Phytosanitary Surveillance, or that a new non-governmental regulatory authority will be founded. The draft law designates that in order for a product to be labeled “organic” or “bio,” the certification process will need to be passed. Russian Government Agricultural experts are currently studying American, European and Japanese certification techniques.

Harmonisation with international and national standards is one of the main goals in producing organic and bio food legislation. The impetus for this move is widely considered to be Russia’s recent accession to the WTO.
Russia producers are interested in taking advantage of the facilitated trade environment and have plans to export Russian-made organic products to the EU.

However, certification will also allow for facilitated import of organic and bio products to Russia from the EU, as the draft legislation mandates that any product labeled organic under EU certification will maintain certification in Russia.

The law is expected to come into full effect in 2015

Source: www.thefishsite.com

Okey Group opens 4th hypermarket in Moscow region

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Okey Group S.A., one of the leading Russian food retailers, announces the opening of its 4th hypermarket in Moscow region.

The new hypermarket is located outside of the city boundaries in a new commercial center. Total space of the hypermarket is 10,600 sq.m.. The trading area of the hypermarket is 6,900 sq.m.. The store offers customers more than 34,000 SKUs, with non-food items accounting for approximately 65% of the total. The store has 370 employees.

This is the Company’s 53rd hypermarket, and 84th store overall, including supermarkets, with aggregate trading space exceeding 434,000 sq.m.

Okey is one of the largest retail chains in Russia. Its primary retail format is the modern Western European hypermarket under the Okey brand, complemented by “Okey – Express” supermarkets.

The Company opened its first hypermarket in St. Petersburg in 2002 and has demonstrated continuous growth ever since. As at 30 June 2012, Okey operated 75 stores in 18 cities across Russia: 45 hypermarkets with an aggregate selling space of approximately 329,000 square meters and 30 supermarkets with an aggregate selling space of approximately 39,000 square meters. As of 30 June 2012 Okey employed more than 20,000 people.

In accordance with the unaudited consolidated financial statements for 1H 2012, Okey’s revenue was RUR 54,122 million, like-for-like revenue growth rate was 7.9% and its EBITDA margin was 6.8%.

Source: www.okmarket.ru

 

Metro Cash & Carry earns €4.12bn in Russia in 2012

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Metro Cash & Carry, a German grocery retailer (and part of the Metro Group), reported sales in Russia of €4.12bn in fiscal 2012, against €3.42bn in 2011 (a 20.4% y-o-y increase).

During the last year the company opened six hypermarkets in the country, and by the end of 2012 Metro Cash & Carry operated 68 outlets.

What is more, another grocery brand in the group, Real, increased its sales in Russia from €722m in 2011 to €859m last year (19% y-o-y growth). However, Real chain is to be acquired by the French Auchan, and the deal is to be completed this year.

Source: www.russiaretail.com

Azbuka Vkusa to develop small shopping malls in Moscow and Leningrad Provinces

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Azbuka Vkusa, a premium class grocery retailer, is planning to build 15 shopping centres in the Moscow and Leningrad Provinces within the next five years. Each will cover up to 4,000 m2 and will house an Azbuka Vkusa supermarket on about 2,000 m2. The rest of the areas will be let to rent to fast food restaurants, laundries and other small businesses. The project development was prompted by a lack of suitable premises and the total amount invested is estimated to be $150m.
Today, Azbuka Vkusa has 53 supermarkets in and around Moscow and St. Petersburg. As Retail Update Russia reported on a previous occasion, the company recently announced plans to expand on the Ukrainian market.

Source: www.russiaretail.com

Magnit revenues rises significantly

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Magnit’s full-year revenue and EBITDA rose significantly, which helped it book a more than 100% rise in net income.

Revenue in rubles increased by 34% YoY from 335,699.95 million RUR in 2011 to 448,661.13 million RUR in 2012. The top line growth was due to an increase in selling space as well as to a 5.26% increase of like-for-like sales (excl. VAT).

Revenue growth in dollar terms amounted to 26%: from US$ 11.4 million to US$ 14.4 million.

Gross margin grew from 24.33% in 2011 to 26.53% in 2012. Gross profit in rubles increased by 45.78% from 81,663.45 million RUR (US$ 2,778.86 million) to 119,051.79 million RUR (US$ 3,828.89 million).

EBITDA increased by 71.64% from 27,604.14 million RUR (US$ 939.32 million) in 2011 to 47,380.48 million RUR (US$ 1,523.83 million) in 2012. EBITDA margin in 2012 amounted to 10.56%. Net debt / EBITDA ration (in ruble terms) for 2012 amounted to 1.07.

2012 net income increased by 104.14% and amounted to 25,117.17 million RUR (US$ 807.81 million) vs. 12,303.84 million RUR (US$ 418.68 million) in 2011.

Source: www.freshplaza.com

Lenta hypermarket in Krasnoyarsk

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By the end of 2013 a new hypermarket Lenta will be opened in Krasnoyarsk.

The total area of the hypermarket will be about 12,000 square meters. Number of items is 20,000 SKU. It is noted that products of local manufacturers will be especially placed there.

Today, Lenta is one of the largest Russian retailers. It was founded in 1993 in St. Petersburg, and now, there are more than 50 hypermarkets in different regions of the country .

Source: www.megamagnat.ru

Interfood St. Petersburg 2013

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Interfood, St. Petersburg, April 10 – 12

Intefood and Prodtech 2012 exposition showcased by 120 companies from 10 countries: Russia, Italy, Bulgaria, Belarus, Polan

d, Ukraine, France, Sri Lanka, Bosnia and Herzegovina, Estonia. During the three opening days over 4100 industry professionals attended the show.

Interfood 2013 will feature the following product categories: bakery and confectionary, poultry, eggs, meat and sausages, fish, seafood, cheese, butter, fresh fruits and vegetables, pasta, cereals, flour, flavorings and spices, ready-made goods, instant food, frozen food, ice-cream, snacks, appetizers, tea, coffee, beverages, water, baby and diet food, as well as products and beverages for cafes, bars, restaurants, gourmet food, ingredients, additives, food colorings, transport and logistics for food industry.

Season 2013 topic: healthy food and wellness. Visitors will be able to get information about availability of ecologically clean and organic food products, edible raw materials and ingredients at stands of the exhibition as well as more other useful information.

For more information see: www.old.restec.ru