Retail

Bigger Players Driving Retail Construction Boom In Russia

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Russia topped Europe’s charts in September for the largest amount of retail construction underway. But even though it’s surpassed Turkey and France, retailers say the size, location and number of shops remain inadequate. In fact, big retail chains are poorly represented across the country. The share of big players in various sectors of retail is now only about 6%. This market is far from consolidation. Property specialists say Russia needs to build more shopping space for large chains and crack down on disorganized outlets and outdoor markets.

Source: www.rt.com

Food retail turnover in Russia grew by 5.3%

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In the HY1 2010 food retail turnover in Russia, including drinks and tobacco, were up 5.3% from the same period in 2009; whereas non-food retail turnover only gained 2.6%.  In July 2010 the share of non-food items in total retail turnover increased and amounted to 51,3% (July 2009: 51.1%). The share of food products, including drinks and tobacco, was 48.7% (July 2009: 48.9%).

In July 2010 the prices for food items (excl. fruit and vegetables) showed an increase of 0.4%, prices for fruit and vegetables lost 0.6%. In the HY1 2010 food items grew in price by 5.7%, non-food items – by 2.2%.

Source: www.rian.ru

X5 Retail Group obtained permit to acquire “Kopeyka”

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The Federal Antimonopoly Service allowed X5 Group to acquire the Trading House “Kopeyka” on one condition: Group will have to reduce the number of stores in some locations.

According to the new law “On the Principles of State Regulation of Trading Activity in the Russian Federation”, which came into force 1 February 2010, X5 will have to sell “Kopeyka” stores in those districts, where its market share exceeds 25%.

Source: www.sostav.ru

Carrefour rethinking Russian move

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According to the group’s CEO Lars Olofsson, Carrefour is considering to begin start-up operations in Russia in the future. The French retailer entered the market in 2009 but then left due to a lack of prospects for expansion or acquisition of local player that would make it a market leader in the short or medium term. “If we go back into Russia, it will be through an acquisition,” said Mr Olofsson in an interview with the Financial Times.

Source: www.fruitnet.com

Magnit Retail Chain Imports Fruit and Vegetables Independently

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By the end of 2010, Magnit, one of the largest Russian retail chains, is planning to open 30 hypermarkets and 650 convenience stores.  Total investment to exceed $1 billion. So far the company has reported 4 hypermarkets and 260 convenience stores opened this year.  Chain’s IR-director explains that high season for openings will be autumn-winter.

Company is also implementing a new strategy of direct import. Magnit has already started to import some volumes of bananas, as well as other fruits and vegetables. According to Magnit’s management, the logistic chains are well-established and operations have become more profitable.

Source: www.retailer.ru, Vedomosti

New Regulations of Russian Retail

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The new Federal law “On the Principles of State Regulation of Trading Activity in the Russian Federation” came into force on 1 February 2010.  However, was postponed till August 1 in order to allow retail chains and suppliers reissue contracts. The Law is supposed to considerably change the rules applicable to trade activities.  The Law restricts the markup of a retail chain to 10% of the price of acquired food products.  This markup is prohibited for a number of socially significant food products.  It also establishes deadlines for payment (10 days for produce) when concluding and implementing supply agreements.  The Law bans certain conditions for supplies, such as: return of unsold goods, requirement for a supplier to undertake marketing, rendering of product promotion services by the retail chain, the requirement to disclose conditions of work with other contractors.  The share of retail chains is restricted by the new Law to 25% of the food market of one region/city in order to avoid monopole situation.

Source: www.russianlawonline.com

Russian Retail Still Segmented

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Agency INFOLine has published a Top-50 Russian retail chain ranking. According to the research, in 2009 the total sales of the 50 biggest retailers grew 8% and reached 1,878 billion rubles, which allowed them to occupy just 12,8% of the Russian retail market.  Market remains quite segmented.  The X5 Retail Group is on top of the list with its USD 8,6 billion capitalization. Significant growth was also shown by discounters Magnit and Kopeika.

Source: www.sostav.ru