Dixy

Steady demand for pears in Russia

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According to major Russian retailer, the Dixy Group, pears are one of the most favoured fruits in Russia, enjoying stable sales throughout the year.

The peak season for pears starts at the beginning of spring with the start of supplies from the Southern Hemisphere. The main varieties during that time period are the Vermont and the Packham.

“Before the embargo, Belgium and Holland had been the main supplier for pears. However, we were lucky that we also had contracts with suppliers outside of the EU, once the embargo hit, so we were able to quickly rearrange distribution with a minimal amount of disruption.” said a representative from the retail chain.

The main pear supplier has become Serbia during January-April, in addition to supplies coming from South Africa, Argentina and Chile from April to September.

Despite suffering frost damage in the spring, the retailer said that they had not noticed any supply issues from Serbia and that the prices are at the same level as last year.

“The green pear varieties remain the favourite amongst consumers, and we currently have the Williams and Chinese pear in our assortment.”

As soon as the Russian embargo was introduced back in 2014, Russian suppliers immediately started to develop this category, actively investing in new growing areas and creating their own supply chain, but the production is still not to the level to be able to cover the demands of the major retail chains.

www.freshplaza.com

Retailers firm prices for socially important products

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Retail chain Metro Cash & Carry firmed prices for socially important goods – milk, bread, cereals and macaroni till mid-April. Previously, retail chain Dixy declared the price freeze until March 9. It concerned buckwheat, rice, millet, macaroni, sunflower oil and butter, flour, dumplings and frozen fish. In addition, the company maintains a minimum trading margin on some items like sugar, salt, cereals, oil, eggs.

Retail network “Okay” firmed prices for some socially important goods at the end of November last year.

www.echo.msk.ru

Retail development in 2015

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Most leading retail companies have already announced their plans for the current year. Magnit presented the most ambitious program of the development. Initially, the retailer planned to open 1,100 convenience stores, 80 hypermarkets and Magnit Semejnij stores and 300-350 cosmetic stores, now they are planning to launch 1,200, 90 and 800 stores respectively.

Auchan plans to open 7-8 stores, investing 10 billion rubles into the development of business in Russia this year. Metro Cash & Carry is going to open the same amount of stores this year as they did the last year (in 2014 they opened seven stores). Neither Metro nor Auchan have not change the plan of developmet for the year.

Lenta is going to launch at least 10 hypermarkets during the first half of 2015 . This is more than in the first half of last year, when the company opened five hypermarkets and four supermarkets. Their plan to double the retail space in three years (from the end of 2013 to the end of 2016) remains in force.

Dixy did not report that their development plans would change this year. Last year, in November, Ilya Yakubson, Dixie president, spoke about the opening about 500 stores in 2015.

In the end of the last year, Tony Maher, head of Okey company, spoke of plans to open more than 12 hypermarkets and to launch new project – about 40 discounters “Da!” in 2015. The start was scheduled for the spring. For this projects the retailer was going to use debt funds in the amount of 8 billion rubles. Today, the retailer intends to continue developing, but at a pace that “would be sustainable for the business and does not require significant new credits at the current rates,” – as it was stated in the report on the results of 2014.

The only company who has not announced its development plans for the year is X5 Retail Group.

www.retailer.ru

Supplies to retail chains frozen because of the collapse of the ruble

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Prices in shops cannot follow ruble devaluation: before retailers dictated terms to suppliers, now wholesalers lay down terms to retailers. If retailer do not want to increase purchase prices, deliveries of products may be suspended.

Maria Kurnosova, representative of the hypermarket chain Auchan, reported that part of the suppliers, both food and non-food categories, sent a letter that they would stop the shipment of goods, if the retailer did not increase purchase prices.

Some producers reported that a similar situation occured with Metro Cash & Carry: part of their suppliers stopped shipments or warned about this.

Anastasia Orlova, representative of the retail group “Dixy”, said that there were no breakdowns in the supplies, although some suppliers sent requests to increase purchase prices, they also refused to participate in the discount promotions.

Despite the penalties (up to 50% of the contract value), many suppliers suspended work. Small companies, unlike large multinational companies, cannot supply at a loss for so long. About 70% of the suppliers are in the process of negotiations, and if after a day or two retail chains refuse to accept reasonable prices, deliveries may stop at all, according to the head of the association “Roschaykofe” Ramaz Chanturia. “Empty shelves will cause panic among the population”, so retailers are likely to make concessions, he said.

Producer of fish and seafood “Agama” informed retailer about price increase in proportion to the increase of the dollar on Tuesday, said Yuri Alasheev, chair of the board of directors, they gave retailers a week for approval. He said, that most networks responded “quite calm”. “I think the situation will be clarified by Monday, when retailers will respond to our letter”, said Alashaev.

Wine importer Simple stopped selling wine for a while, it is not possible to order drinks on their website at the moment. Online assistance of the website confirmed that the sales were frozen because of the economic situation, and the problem would be resolved in a day or two. Anatoly Korneev, vice president and co-founder of the company, said that this was a “temporary measure”.

Andrew Agarkov, commercial director of the supplier Uvelka (buckwheat and rice) said that they continued supplies to retailers with the old purchase price and would raise prices in February according to the plan after the negotiations with retailers.

With the constantly growing currency rate there is no time for neg long negotiations on the revision of the price, although there is a rule that it should take 45 days, according to Dmitri Leonov, deputy chairman of the association “Rusprodsojuz”.

www.top.rbc.ru

Magnit and Lenta conquering Siberia

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Magnit and Lenta, along with a local chain, Holiday Klassik, will be the key retailers in the region in the future. Their market penetration in the region will grow faster than those like X5 and Auchan, while product availability on their shelves may become better thanks to the investment into distribution centres.

Russia’s leading market player Magnit, which has operated a distribution centre in Omsk since 2012, recently launched a 19,000 square metre leased distribution centre in Novosibirsk. Investment in logistics facilities clearly shows retailers’ focus on the store expansion in Siberia. Magnit opened its first store in Siberia in 2010 and expand the network to 120 by the end of 2013.

St Peterburg based Lenta opened its first hypermarket in Siberia in 2006 and since then it has opened 17 large outlets. In addition to that it opened a 37,500 sq m distribution centre in Novosibirsk last year. The retailer recently opened its first hypermarket in Krasnoyarsk and it is building its sixth store in Novosibirsk while a new store is planned for Novokuznetsk.

Auchan operates two Auchan hypermarkets and two Auchan City compact hypermarkets, X5 runs 25 small stores and one hypermarket while O’Key has five hypermarkets and one supermarket. In contrast to them Dixy Group and Rewe Group have not penetrated the region yet.

www.freshplaza.com

“Green” retailers

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Greenpeace made an annual rating called “Green supermarket” where Russian retailers are rated by the level of contribution in recycling problem solvation. First places were taken by “Auchan” and “Dixy”.

Experts were comparing and estimating 10 biggest supermarket networks – “Auchan”, “Dixy”, Х5 Retail Group, “Lenta”, “O’kay”, “Magnit”, “Holiday classic”, “Maria Ra”, “Sedmoy Continent” , and “Monyetka”. These retailers were estimated by 20 criteria such as receiving packaging for further recycling, reduction of packaging, a possibility of using own packaging for catchweight goods, a presence of goods with ecofriendly packaging.

“Auchan” took the first place due to the opening recycling centers in St. Petersburg and the possibility of buying catchweight goods. “Dixy” was also pointed out because of the presence of recycling centers in Moscow and the sale of original non-disposable bags.

“O’kay”, “Sedmoy Continent”, and “Monyetka” are turned to be at the end of the rating list.

“Unfortunately, even leaders of our list are far from being “green” retailers. However, most of them are changing their policy: refusing from free plastic bags, letting do weighting of fruit and vegetables without packaging, and even opening recycling centers. Directors of stores understand that such actions are attracting attention of new clients and making their stores more competitive on the market,” – Rashid Alimov, a coordinator of “Greenpeace Toxic Program”, said.

www.retailer.ru

GC “Dixy” stocks status is promoted

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On November 6, 2013 GC “Dixy” stocks have been added to MICEX “A” first-level list. According to Fedor Rybasov, the vice-president of GC “Dixy”, promotion of the company’s securities status indicates a high level of corporate management and reflects investors’ interest in the retail sector. “The “A” first-level list places the highest requirements for issuing companies, and, therefore, is the most reliable for investors”, – he added.

www.retailer.ru

Dixy receives international recognition

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Russian FMCG-retailer Dixy has been declared as «The Best European retail network» and awarded Conecta Premios during the international trade forum «Fruit Attraction» held in Madrid.

As the company says, Dixy has been implementing the direct import of vegetables and fruit since 2010. Right now, 120 companies from 23 countries are suppliers of Dixy. The share of these categories in the company’s net turnover is 13%. Bananas, apples, and tomatoes are all-seasons sales leaders in quantitative and monetary terms.

«Fruit and vegetables are strategically important products in «next to home» stores, but most of fruit and vegetables simply don’t grow in Russia due to its’ climate. That’s why we see a bigger potential in cooperating with European partners», – said Marat Magkeyev, the vice president of logistics and international communication department.

The winners of Conecta Premios among retail networks were chosen by voting of producing companies and suppliers. Grupo El Árbol (“Best quality and freshness”), Carrefour (“Innovative idea”), NaturaSí (“Stable project of ecological supermarket”) and Grupo El Corte Inglés (“Cooperation with supplier”) also became the winners this year.

www.retailer.ru

“Dixy” network has summed up results of local products promo-activity

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“Dixy”, one of Russia’s largest retail chains, leading its activities in the field of food retail this month has begun summing up the program of domestic producers’ support, “Own. Local”, which resulted in sales growth by 15-20%, depending on the region.

“It is an element of “Dixy” stores conception, to offer local goods to the buyer. We make these products more visible on the shelves, marking their price tags with a bright sign “Own. Local” and observe the gratitude of customers who rely on their producers and gladly buy local products,” said Denny Perekalski, marketing director of “Dixy”.

The program was attended by dozens of Russian producers, who submitted about fifty kinds of products to the shelves of the retail network, including fruits, vegetables and juices.

Meanwhile, foreign companies that operate in the territory of Russia, have been excluded from the activity, as the main idea of it was to support local producers of different regions of the country.

Source: www.fruitnews.ru

Top Five

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The market share of the five largest companies in the food retail will grow from the current 18% to 30% in 2015, but the change of the leader is not expected, said Natalia Kolupaeva, Raiffeisen bank customer analyst.

“At the end of 2015 we will approach more or less the average Europe rate; the major players – top 5 companies – will get about 30% of the market. And these companies are already known today, the changes are not expected, besides the relocation of X5 Retail Group and “Magnit”, – she said during the telephone conference on the forecast for the development of the consumer market in Russia.

According to the analyst, other major companies – besides X5 Retail Group and “Magnit” – will be “Auchan”, Metro, and “Dixy”, which will continue their aggressive campaign to promote and expand their networks.

The limit of beer sales in retail outlets less than 50 square meters (from January 1, 2013) and the law in draft proposed by Public Health Department, according to which tobacco products will not be sold in small retail stores, will also favor the expansion of retail networks, excluding small stores from the food market.

However, according to the forecast, the annual growth rate of the food retail market will be reduced from 9% to 8% in the period from 2013 to 2016 as Raiffeisen bank analysts said.

Source: www.retailer.ru