Russian retail market

Russian Retail Market: Finnish Kesko Opens Grocery Chain in Russia

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The Finnish retail group Kesko, which is already present on the Russian market with a chain of DIY hypermarkets K-Rauta, is planning ot open a grocery chain. 2012-2013 the company plans to open four supermarkets K-citymarket: two in St. Petersburg or Leningrad region and two in Moscow region. At the same time Kesko is considering buying a local grocery chain. Talks with “Lenta” owners have already taken place at the beginning of the year.

The group Kesko owns about 2,000 stores in Scandinavia, the Baltic states, Russia and Belarus. 2010 the net sales amounted to €8.77bn. In Russia the company operates 12 DIY hypermarkets K-Rauta (in St. Petersburg and the Moscow region), the net sales 2010 reached €204m.

Source: www.foodnewsweek.ru

17% of the Retail Turnover Fall on Moscow

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According to the marketing research “Russian retail market 2004 – 2010”, carried through by “AMIKO”, the retail turnover structure is very diverse in different regions.

The biggest retail share – about 17% – belongs to Moscow. Only 12 federal subjects share about 54% of the retail turnover. These are Moscow and Moscow Region (6%), St. Petersburg (4%), Sverdlovskaya Region (4%), Krasnodar Territory (4%), Tyumen Region (4%), Republic of Bashkortostan (3%), Rostov Region (3%), Republic of Tatarstan (3%), Samara Region (3%), Chelyabinsk Region (2%) and Nizhni Novgorod Region (2%).

All the rest regions account for about 45% of the retail turnover. At the same time the largest federal subjects (Moscow and St. Petersburg) lose about 1.5-2% of their share every year, as they have a lower pace of retail turnover growth.

Source: www.foodnewsweek.ru

Russian Retail Market: the Number of Hypermarkets Grew by 50% a Year

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2004 there were recorded 61 hypermarkets in Russia, in 2007 there were already 214. 2008 the growth declined by 27%, in 2009 there were only 2 new hypermarkets opened. 2010 the growth accelerated again and the number of hypermarkets grew by 16% and reached 318 (not including cash&carry format stores).

Source: www.product.ru

X5 Retail Group to Impose Obligatory Nitrates Concentration Tests for Fresh Produce

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X5 Retail Group reported that it imposes obligatory nitrates concentration control in all of its distribution centers. Until now such tests were carried out occasionally by specialized laboratories – only during high season or when the imported fruit and vegetables looked suspicious.

The company acquired 17 mini-labs and 17 portable testers, registered in the State registrar of measurement devices, which allow carrying out primary express-checks of the nitrates level directly near the truck.

X5 Retail Group is Russia’s largest retail company which owns “Pyaterochka”, “Perekrestok”, “Karusel” retail chains and discounter chain “Kopeyka”.

Source: www.business-magazine.ru/spb

Russian Retail Companies Become Importers to Reduce Price Growth

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Fruit import can hardly be considered as a high-yield business: the average profitability is about 5% due to the intense competition and the companies’ liability to keep the price level low. Direct import allows to improve the quality of the product range by reducing the supply chain and to make the retail prices more competitive.

Among the largest Russian retailers it is only X5 Retail Group which isn’t planning to become an independent importer. Russian retail chain Dixy has started its own import of fruit and vegetables which account for 12% of the total turnover. At the moment the chain imports 50 items of this category – about a half of the fruit and vegetables range.

Metro Group Buying provides Metro Cash & Carry with 80% of the imported produce. The company’s representative says that the share of the imported goods will grow. The French hypermarket chain Auchan imports fruit and vegetables from Spain and Portugal.

Source: www.foodretail.ru

Fruit import can hardly be considered as a high-yield business: the average profitability is about 5% due to the intense competition and the companies’ liability to keep the price level low. Direct import allows to improve the quality of the product range by reducing the supply chain and to make the retail prices more competitive.

Among the largest Russian retailers it is only X5 Retail Group which isn’t planning to become an independent importer. Russian retail chain Dixy has started its own import of fruit and vegetables which account for 12% of the total turnover. At the moment the chain imports 50 items of this category – about a half of the fruit and vegetables range. Metro Group Buying provides Metro Cash & Carry with 80% of the imported produce. The company’s representative says that the share of the imported goods will grow. The French hypermarket chain Auchan imports fruit and vegetables from Spain and Portugal.

Walmart cashes out of Russian Retail

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Walmart is not the only major international retailer to pull out of Russia in recent years after failing to establish a viable business in the country. In October 2009, French retail giant Carrefour announced it was pulling out after opening just one shop in Moscow and another in the southern city of Krasnodar.
The discount retail sector in Russia, where Walmart operates, is severely underrepresented.
There are only two international hypermarket chains, Auchan and Real, operating in this sector, so the market is certainly not saturated. Walmart International CEO Doug McMillon said that Walmart will continue to pursue market entry opportunities

Source: en.rian.ru

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

Wal-Mart Negotiates with Kopeyka

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Wal-Mart – the world’s largest retail chain – resumed negotiations with Russian discounter chain Kopeyka.  Earlier in the year,  X5 – Russian retail market leader – was reported to almost complete the purchase of Kopeyka.

“The Trading House Kopeyka”, which runs the chain, launched the second public offering of its bonds at the MICEX stock exchange with the total volume of RUB 3 billion. The first warrant rate is 9% per annum.

Source: www.retailer.ru

Discounters and Hypermarkets Top the Russian Retail Market

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According to the “Ranking of FMCG retail chains of Russia”, by the INFOLine Agency, the growth of shopping space of  top 70 Russian FMCG chains is more than 315,000 sqm estimated from January to September 2010. Russia’s 70 largest FMCG retailers opened 874 shops within this period. Among expanding retailers are such chains as Magnit, Karusel, O’key hypermarkets, Victoria, Atak, Azbuka Vkusa supermarkets, as well as Diksi, Kopeyka, Maria-Ra, Holiday, 7ya Sem’ya, Kvartal, Monetka, Aniks discounters and convenience stores and others. As of October 1 2010, top 70 FMCG retailers have 10,928 outlets with the total sales space 7.1 million sqm.

As of October 1 2010, there were 424 hypermarkets in Russia with the total sales space of 2.7 million sqm. During January – September 2010 it grew by 39,000 sqm.

The number of supermarkets, run by the top 70 retailers, was 1169 as of October 1 2010, their total sales space was more than 1.2 million m2. The sales space growth from January to September exceeded 16,200 m2.

The total number of discounters and convenience stores was approx. 9,335, with the total sales space about 3.3 million m2. The January – September growth was more than 296,000 m2.

Source: www.retailer.ru

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