Market News

Volga Group purchased 40% of Alma Group Company

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Volga Group Company has acquired 40% of the shares of Alma Group, the company specializing in cultivation of apples. Other shares still belong to the founder of the company, Jean-Claude Mann.

Production facilities of Alma Group are located in Abinsk (Krasnodar region), where the company operates on over 800 hectares of land. There are refrigeration units and warehouses, processing and sorting factories, owned by the company. In 2013, the production output exceeded 6,800 MT of apples. Nevertheless, the company plans to increase production up to 12,000 MT of apples per year. Moreover, the range of fruit and vegetables is likely to be expanded.

This is our first asset in the agricultural sector. I am sure this investment will contribute to the development of the company, – has said the shareholder of Volga Group Gennady Timchenko.

Volga Group is 100% owned by Gennady Timchenko, combines his assets in Russia and abroad. Timchenko owns 23% of Novatek, 15.3% of SIBUR, 80% of Transoil, 63% of Stroytransgaz, 30% of Kolmar, and other assets.

www.freshplaza.com

Real wages decreasing in Russia

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Economist Dmitry Prokofiev in his interview to the internet portal dp.ru told about the current economic situation on the Russian market. For the first time since November 2009, there is a wage decrease in Russia. 5 years ago, the growth of wages was presented as a sign of overcoming the economic recession, but now, for some reason, no one says that the wages decrease is a symptom of a new recession.

Wages have been decreasing for 2 months already. On an average, in September wages went down by 1%, in August – by 1.2%, but in some industries they decreased by 4-5%.

Retail trade also slowed down, in the first quarter it increased by 3.6%, in the second – by 1.9%, and in the third – only by 1.4%.

At the same time, inflation is growing. In September, the official inflation rate in Russia was 8% (that is the highest rate for the last 3 years). The fastest growth of prices can be seen in food sector. During January-September 2013, the inflation rate in this sector was 2.2%, this year it is 7.1%. Car production in Russia, the growth of which we saw recent years, in September fell by 18%.

The Russians began to buy less. According to Romir agency, in September 2014 everyday consumer spending decreased by 6% in nominal terms compared to August 2014. Non-food consumer goods sales decreased by 17%. At the same time, the Russians began to buy more electronic devices, while prices for them are still the same.

Even the Russian market of luxury goods decreased (the recession if 2008-2009 almost did not influence it). In 2013, it was 10th in the world and fifth in Europe, but this year, as analysts predict it will decrease by 18%.

www.dp.ru

X5 Retail Group launches new Perekrestok store concept

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X5 Retail Group has launched a new Perekrestok supermarket concept in Moscow and acquired a local chain in the Samara region.

New supermarket concept
After a successful relaunch of Pyaterochka discount store concept, X5 Retail Group has launched a new Perekrestok supermarket concept in Moscow. The store concept has a new outdoor design including an updated logo, improved store navigation and better use of sales area. The assortment has been expanded in product categories like bakery, fish, seafood and ready meals. X5 will develop the Perekrestok network in three subformats with sales area of 800, 1,000 and 1,500 square metres, located in shopping malls, residential areas and on high streets. The current network of 389 Perekrestok stores will be refurbished to the new concept in the next three to four years. 

Acquisition in Central Russia
X5 Retail Group has improved its market position in the Samara region (Central Russia) through the acquisition of Agrotorg-Samara chain. Argortorg-Samara, X5’s former franchisee, operates 116 stores with estimated revenue of RUB3 billion in the first half of 2014.

Our view (IGD)
The rebranding of Perekrestok supermarket to a new concept was a smart move to differentiate itself from rivals especially in Moscow, where the competition is already strong. The expansion of fresh product ranges proved successful at X5’s new Pyaterochka discount concept and its success may be replicated at Perekrestoks.

The acquisition of Agortorg-Samara could suggest a move back to X5 Retail Group’s strategy of store expansion via M&A. In the last couple of years, X5 has developed its store networks through organic expansion only.

www.freshplaza.com

Apple prices will go up

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The Association of Russian Gardeners thinks prices for apples will go up. Their estimation amounts to 60 roubles (1.20 Euro) per kilo. According to the association’s chairman, the supply of apples is insufficient for meeting demand during the entire season. Starting early 2015, a shortage of apples is expected. Storage facilities are also insufficient, slowing down production. According to the organization, total apple consumption is 2 million tonnes per year, while domestic production amounts to 500-600,000 MT. Usually, domestic cultivation was on the market until December, after which the apples were imported; mainly from Poland and Moldova.

www.freshplaza.com

Russian retailer Magnit to open agricultural distribution centre in Penza region

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Distribution centre of agricultural products is planned to be built in the Penza region. The total area of the centre will reach 40 thousand square metres. The investment for the project (i.e. 29 million Euro) is said to be provided by the JSC Tander, a management company of the retail network Magnit.

The centre is believed to improve the logistics system, and to supply the stores of the network with local goods, – said the Chairman of Penza Government Vyacheslav Orel.

Daily turnover of potatoes, vegetables and fruit is estimated at 70 million rubles (1.4 million Euro), the delivery radius is 200 – 400 km. The distribution centre will create about 1500 job positions.

According to the Minister of Agriculture in Penza region Andrey Burlakov, over the past few years the regional agriculture has demonstrated a dynamic growth of production. Moreover, retail chains in the region are keen to sign the contracts for the supply of local products to their stores.

www.freshplaza.com

Russia State Duma introduces quota to cap foreign products on domestic store shelves

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Deputies of the Moscow region initiated a project to introduce quotas on product imports in Russian stores. In the future, according to the deputies, the share of foreign goods at grocers is not exceed 50 percent. The law could affect all retailers.

Deputy of the regional Duma of the Moscow region Nikitai Chaplin, who is one of the authors of the amendments to the law on “trade”, also said that it was the repeated appeals from domestic producers, who said that they were being discriminated against by networks, that inspired the idea.

The countries of Belarus and Kazakhstan have also fallen under the category of “importing countries”.

“After the sanctions were implemented, trade networks are simply replacing some imported goods on their shelves with other (imported goods). For example, European and Brazilian goods. Russian producers are not winning as a result of the accepted government measures,” Chaplin said.

Andrey Karpov, executive director of The Retail Companies Association, said: “in Russia, there are not enough domestic producers that could ensure trade networks of the quality of their products as well as the security of supply, which often leaves much to be desired”.

The share of goods imported by premium-class supermarkets currently amounts to no less than 65 percent. For other trade outlets, the share of imported goods is about 50 percent.

www.fruitnews.info

New food retailer to open in Vologda region, 200 stores by 2018

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The Governor of the Vologda Oblast, Oleg Kuvshinnikov, announced plans for a new food retail network to appear in the region. The retail network will boast the brand name Nastoyashiy Volgogradskiy Produkt.

The number of stores across the area is to reach as much as 200.

“In the regions of the Vologda Oblast, there are already 15 of these stores opened under the brand name Nastoyashiy Volgogradskiy Produkt. By 2018, we have agreed that there will be more than 200 stores and they will open in each municipality. This is indicative of the growing grocery patriotism of Vologda. People understand that this is a guaranteed quality, it’s the environment, it’s the lack of preservatives and dyes.

Kuvshinikov also added that 52 companies and producers received certification to supply these trade points.

“The products under the label Nastoyashiy Volgogradskiy Produkt are currently supplied to 14 different countries and to more than 30 regions in Russia. We went to almost every major federal retail chain. A federal network such as the PiR Food and large supermarket Utkonos, we entered into a direct agreement for supplies,” the governor said.
www.fruitnews.info

Serbia increased the shipments of the apples to the Russian market almost by 6 times

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According to industry experts, Serbia has increased the shipments of the apples to the Russian market almost by 6 times since the beginning of the season.

According to the Russian Federal Statistics Service, in the first two months of the season 2014/15 Serbia shipped to Russia more than 8,000 tons of apple, while during July-August 2013, the shipment of apples from Serbia to Russia amounted to 1,400 tons.

According to the experts, Serbia managed to increase supplies to the Russian market mostly due to the Russian food ban as a substitute for apples from Poland and Moldova. The experts do not exclude that Serbia has a chance to become one of the main suppliers of apple on the Russian market provided that the ban will continue.

www.freshmarket.ru

New Magnit hypermarket in Russia

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Russia’s largest food retailer Magnit announced the opening of its 174th hypermarket in Russia. The new store is located in Samara, the Volga region.

The range of goods of the hypermarket consists of 19400 items, with food accounting for about 65% of the range. Trading space is equipped with 25 cashiers. Commercial property is owned by the Company.

As of October 1, 2014 the network Magnit has 7891 convenience stores, 174 hypermarkets, 66 Magnit Family shops and 886 drogeries, located in more than 1950 territorial subjects of the Russian Federation.

www.freshplaza.com, www.magnit-info.ru

Muscovites began to spend less money in restaurants

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Compared with August last year, Muscovites began to spend less money in restaurants. The average check dropped by 226 rubles. At the same time, now Muscovites spend 1,136 rubles more in the grocery stores than in August 2013. These data were received by VTB24, analyzing the information of POS-terminals in the biggest outlets (cafes and restaurants, grocery stores, electronics stores, clothing and footwear), where it is possible to pay by VTB24 credit card. The study was conducted in the period from August 2013 to August 2014 in retailers “Auchan”, “Magnit” and “Hyperglobus” and coffee shops “Chocolate”, “Coffeemania”.

www.the-village.ru