Russia’s No.2 food retailer Magnit by sales, is targeting Siberia as it presses on with a rapid expansion into the country’s regions which it believes can deliver at least another four or five years of strong growth.
Sergei Galitskiy, who opened his first shop in 1998 and has built Magnit into a 6,000-store empire, told Reuters he would stick to a winning formula of targeting low- to middle-income shoppers through mostly convenience stores.
Magnit turned over $11.4 billion in 2011, compared with $15.5 billion at Russian grocery leader X5 Retail.
But it is currently growing three times as quickly as it opens three stores a day and as X5 struggles with its shift away from acquisition-led growth and underperforming hypermarkets.
Magnit expects revenue growth, which has run at an annual rate of around 40 percent in recent years, to slow to 30-32 percent this year and gave preliminary guidance last month that it would ease further to 25-27 percent in 2013.
Magnit is grabbing business in towns from outdoor markets, kiosks and independent shops. It plans to add 800-1,000 convenience stores, up to 60 hypermarkets and 500 cosmetic shops next year – similar to the expansion this year.
Source: www.reuters.com