Market News

BRIC countries in top 5 global grocery markets by 2015

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Joanne Denney-Finch, chief executive, IGD, says: “In 2015, the combined grocery markets of Brazil, Russia, India and China will be worth €2,194 billion and they will have a collective population of more than 3 billion people.

Many retailers and manufacturers have already built a strong presence in these countries, but for those that haven’t, it’s vital that they incorporate the BRIC markets into their strategic planning in order to sustain business growth.”

Growth in Russia is predicted to accelerate over the next four years, with its grocery market doubling in value from €194 billion to €394 billion in 2015, taking it from seventh to fourth position.

Source: www.franchise-plus.com

The Ministry of Finance Aims Annual Economy Growth of 6-7%

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According to Alexey Kudrin, Vice prime-minister and Minister of Finance, Russian GDP should gain 6-7% annually. Last year GDP saw the 4% growth and reached RUB 44.49trn. The forecast of the Ministry of Economic Development expects GDP growth 2011 to reach 4.2%, 2012 – 3.9%, 2013 – 4.5%. In January 2011 The Ministry of Economic Development estimated the annualized economy growth at 4.3%.

Source: http://top.rbc.ru/economics/

Inflation in Russia depends more on food prices

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Economists believe that 2011 inflation in Russia will become even more dependent on food prices. After Rosstat (Russia’s State Statistics Office) studied Russian expenditure patterns, it revised the inflation calculation basis. The share of food in the expenditures structure has risen from 37,97% to 38,5%. The increase is basically due to a dramatic price growth on cereals, fruit and vegetables, which took place at the end of 2010.

Source: http://top.rbc.ru/economics/

Grocery chains grow as recovery sets in

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With a total turnover in 2010 of 7.1 trillion rubles ($239 billion), the retail food market is growing at 13 percent — more than twice the rate of the economy as a whole — and leading retailers are seeing growth of 30 to 40 percent. However, the main driver for food retail growth is the growth of prices.

The X5 Retail Group, the largest food retailer, plans to open 540 new stores all over the country. Magnit, the supermarket chain with the greatest geographic coverage, is to open 800 convenience stores and 55 hypermarkets. Discount chain Dixy hopes to open 150 convenience stores in Moscow and the regions, and intends to attract customers with a new logo, more efficient operations, sales and discount cards.

This expansion will build on last year’s boom, in which X5 added 1097 new stores, including 660 stores via its acquisition of competitor Kopeika. Magnit opened 827 stores, compared with 646 openings in 2009. Dixy had 646 stores open in the end of 2010, up from 623 open the previous year. With last week’s purchase of rival Victoria Group supermarket chain, Dixy will own 901 stores. Sedmoi Kontinent had 146 stores at the end of the year mostly in and around Moscow, compared with 139 a year earlier.

X5’s net revenue for 2010 was 341.6 billion rubles ($11.2 billion). Magnit earned 7.1 billion rubles ($241 million) for the same period. But the market is highly fragmented, with none of the major players having more than 4 percent share, according to UralSib.

Source: www.themoscowtimes.com

EU Sees Russia in WTO Within 12 Months

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The European Union confirmed on Thursday that Russia could join the WTO within the next 12 months, following agreement to phase out Russian export tariffs on raw materials.

Russia’s willingness to phase out export duties on raw materials such as timber — which drive up the cost of inputs for European manufacturers such as the Nordic timber and paper industries — removes a European veto on Russia’s accession.

There are other hurdles remaining to tackle before accession, such as state payments to farmers and ceilings on beef imports entering the country at low tariffs. At some point Russia and other WTO members also will have to address Georgia’s objections to Russian membership of the WTO.

Source: www.themoscowtimes.com

X5 Retail to Launch Economy-Class Hypermarket

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X5 Retail Group has opened the first of its economy-class hypermarkets under the Pyaterochka-Maxi brand. Pyaterochka-Maxi is focussed on sales of food and non-food items to retail and wholesale customers. The main competitive advantage of Pyaterochka-Maxi is price leadership. It will offer the best prices by monitoring all competitors and meeting or beating them on every item. Wholesale bulk purchases will be entitled to an additional volume discount of 10-15%.
CEO Lev Khasis said: “This new economy-class hypermarket format will enable X5 to enter new markets and reach low income customers that are under-served by the competition.”

Source: uk.ibtimes.com

Kiosks Reopen After Crackdown

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Owners of kiosks and other street businesses in Moscow won a respite Tuesday when the city government signed off on a draft order to regulate mobile, small-scale retail businesses.

Following an enthusiastic campaign to rid the city’s streets of vendors, Moscow officials are blushing after it was discovered that no formal order to remove the kiosks was ever issued.

As it turned out, the final document was relatively innocuous. The order requires the city’s architecture committee to develop a new plan for the placement of small-scale retail businesses “taking into consideration the transportation situation, residents’ needs and convenience of the location.” The plan should be completed by May 1, 2011.

Source: www.themoscowtimes.com

JFC Group ‘records major loss’

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Russian fruit and vegetable importer Joint Fruit Company (JFC) Group has reportedly recorded a major revenue drop to RUB 8.18bn (EUR 19.3m) for the first nine months of 2010 (a 6% fall in compared with the same period a year before).

Reports also indicated that JFC,  which is well-known in the country for its Bonanza banana brand, suffered a loss of more than RUB 253m (EUR 5.98m) during the nine months, compared with a profit of RUB 153m (EUR 3.62m) a year before.

Based in St Petersburg, JFC has operations spread across Russia, maintaining offices and logistics terminals in Moscow, Novosibirsk, Krasnodar, Ekaterinburg, Chelyabinsk, Kazan and Nizhniy Novgorod. In addition, the group operates production subsidiaries in Ecuador, Costa Rica and Cyprus.

Source: www.fruitnet.com

Fruit and Vegetables Inflation Rate in Russia Reached 54%

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Fruit and vegetable index of Fruit-Inform shows that cost of fruit and vegetables for the Russian consumer in mid November was on average 54% higher than in the same period of last year.
The largest increase of prices was registered for traditional vegetables and potatoes. Their main set was up in price by 141% comparatively with the last year! Glass-grown vegetables were on average 26% higher in price than a year before, fruits – only by 5%. Fruit and vegetables keep on increasing in cost in Russia. Within the last week, prices for fruit and vegetable produce grew on average by 5%. All main categories of fruit and vegetables were increasing in price.

Source: www.lol.org.ua

Fixed Fee Imposed by the New Customs Code in Russia

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The Russian Federal Customs Service has taken into account complaints of the business and is trying to facilitate the customs clearance procedure by setting a fixed fee which doesn’t depend on the value of cargo. The customs clearance procedure is supposed to become faster and easier, but experts are warning that the new system will have a negative effect on medium-sized businesses.  At the moment it is being agreed upon the amount of the new fixed fee; initially it was suggested that it should be as much as 5,000 rubles (approx. USD 160). Dmitri Medwedew admitted that Russia is losing potential investors due to the long and costly customs clearance procedures, partially caused by time spent of identifying and verifying the cargro value.

Source: www.retailer.ru