Russian retail market

X5 Retail Group to import 100% of its fruit & veg directly

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The X5 Retail Group (“Pyaterochka”, “Perekrestok” and “Karusel”), primarily owned by Russian billionaire Mikhail Fridman, aims to be able to import 100% of its fruits and vegetables, without intermediaries, by 2019. At the moment, the retailer directly buys from abroad about 20% of its fresh produce.

In order to make it possible for the retailer to import everything directly, the firm will set up contracts with foreign producers, which will allow it to know what the exact price of the products will be, while managing the shipment and delivery terms, which is impossible when working with distributors, reported X5 in a statement.

To do this, the X5 will open two warehouses in rented space, which will be supplied solely by products from abroad until the end of 2016. This arrangement also reduces the duration of travel of fruit and vegetables from abroad by three days. This year, the company will start to operate warehouses in St. Petersburg and Novorossiysk, totalling 6 thousand square metres each, and in 2017 another one will come into operation in the Central Federal District.

At the moment, the company already has more than 100 contracts with foreign producers; a figure it plans to double within the next two years. The retailer is collaborating with suppliers of the EAEC and CIS countries, as well as from Georgia, Syria, Iran, Morocco, Serbia, Macedonia, Moldova, Egypt, Israel, China, India, South Africa, New Zealand, Mexico, Ecuador, Colombia, Argentina and Chile.

www.freshplaza.com

Azerbaijani companies to supply major Russian food retailer

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X5 Retail Group, Russia’s second largest food retailer, will receive produce directly from member companies of the Azerbaijan Fruit and Vegetables Producers and Exporters Association (AMTIIA ), the Azerbaijan Export and Investment Promotion Foundation (AZPROMO) reported.

The decision was taken within the framework of AMTIIA’s meeting with representatives of X5 Retail Group. The sides discussed the direction of mutually beneficial cooperation and took a decision on the direct export of fruit and vegetables to the Russian market.

Headquartered in Moscow, X5 Retail Group operates such trade networks as Pyaterochka, Perekrestok, and Karusel.

The newly-established AMTIIA is responsible for boosting Azerbaijan’s export potential in the fruit and vegetable sector as well as increasing overall production levels.

Currently, some 14 Azerbaijani companies are allowed to export their agro-production to the Russian market.

The northern neighbor is still one of the main trade partners of Azerbaijan, which has long had a well-established place on the Russian market. The country currently ranks fifth in Russia’s foreign trade with the CIS countries (following Belarus, Kazakhstan, Ukraine and Uzbekistan).

The trade turnover between Azerbaijan and Russia amounted to $1.06 billion in January to July 2016, while some $212.9 million of the figure accounted for the export to this country.

www.freshplaza.com

Russian retail is negotiating the supplies of fruits and vegetables from Uzbekistan

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The largest Russian retail chains are negotiating the supplies of fruits and vegetables from Uzbekistan. Magnit, Auchan, 6 sotok, Essen and others showed their interest in Uzbek fruits and vegetables.

After the visit of the President of Uzbekistan to Russia and negotiations with Vladimir Putin, a number of Russian companies sent the request for Uzbek fruit and vegetables.

According to the inner source, a long-terms agreements for 5 and 15 years are being negotiated.  Uzbek companies suggest one price for the year.

Long-term agreements will allow Uzbek companies to focus on the production of the necessary volumes of exports of agricultural products and form logistics. Distributional centers for logistics, storage, processing, export will be created in 11 regions of Uzbekistan. Fruit and vegetables will be supplied there from the fields, where they will be stored in refrigerators for further shipment to export or processed into finished products.

When the sanctions are over, Uzbek companies will have some advantages, for example, Turkish companies work separately, and Uzbek companies act as a united group, although a lot is to be done.

www.fruit-inform.com

Syrian fruit and veg arrive on Russian retailer shelves

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The first shipments of Syrian fruits and vegetables, bound, in part, to replace the Turkish products covered by the import ban, have started arriving to Russia, as reported by the importer Adyg-Jurak to the newspaper Kommersant.

“Syrian fruits and Vegetables are already being delivered by Adyg-Jurak to the wholesale and retail firm Food City. Talks are also underway with other large Russian retailers,” informs the magazine.

CEO Aslan Panesz said that last week marked the arrival to the port of Novorossiysk of the second batch of oranges, lemons, grapefruit, tomatoes and cabbage, with a total weight of about 3 thousand tonnes.

During the delivery of the first batch, some problems occurred, as about 1.2 thousand tonnes of food stayed in the port for more than 10 days because of issues in the customs documents, with the result that some of the products spoiled. During the unloading of the second batch, these problems have been solved.

Currently, products are on the shelves of Moscow’s wholesale-retail center Food City and several wholesale centre in the south of Russia.

Russian retailers are also beginning to purchase Syrian fruit and vegetables. In April, Metro Cash&Carry is going to sell Syrian pomegranates (2 MT), cauliflower (4MT), pepper (20 MT), eggplants (10 MT) and eggplants. Since this is the first shipment of fruits and vegetables from Syria, the company imported small volumes for analysis of the demand for these products. According to Metro Cash & Carry representative, the retailer sell 300 MT of fruits and vegetables per day on average.

According to the Ministry of Agriculture, since the beginning of the year to March 13, food import from Syria to Russia  amounted to $ 2,389, the total amount of deliveries – about 5,000 MT. Food export from Syria to Russia rose by almost 3 times during one year.

www.freshplaza.com, www.retailer.ru

Metro AG to retrench and refocus on Europe

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German retailer Metro AG’s global reach across 30 countries was supposed to insulate it from market swings. Instead, turmoil around the world has battered the company, forcing the chain to retrench and refocus on Europe.

With a retail empire of more than 2,000 wholesale, food retail, consumer-electronics stores in Europe, Asia and Africa, Metro has a big presence in emerging markets. But crises in many of these countries, including Russia, Greece, Egypt, over the past few years have hurt its results.

The Russian market has been the key market to Metro AG. In 2013, almost 90% of income came from this region. Up to 2014 the share of the Russian division accounted for a quarter of total operating income of the group. However, after the imposition of sanctions by the European Union and the beginning of the economic crisis in Russia, the situation changed dramatically. After the introduction of the food embargo, Russia Metro could quickly replace some banned products with Russian goods, but because of the collapse of the ruble, Metro’s loss was about €1 billion.

According to Olaf Koch, Metro AG CEO, in 2016 a priority market for the company will be Germany, which last year accounted for 38% of group revenues. In Germany, from January to November 2015 Metro sales grew by 2.8% – that is the maximum growth since 1994.

Money from the sale of assets (Galeria Kaufhof, units in Vietnam, Denmark and Greece) will go to the development of online trading according to Koch.

www.retailer.ru, www.wsj.com

X5 Retail Group is going to sell Iranian products this spring

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This spring, fruits and vegetables from Iran will appear on the store shelves of the X5 Retail Group’s three chains: Pyaterochka, Perekrestok and Karusel, according to a company press release.

The trade relationship between the retailer and Iranian exporters was established alongside the efforts of two countries’ embassies.

X5 Retail Group is interested in importing Iranian tomatoes, carrots, garlic, onions, bananas, watermelon, persimmons, pomegranates, figs, pineapple, pineapple guava and other fruits and vegetables as well as fish and seafood.

www.fruitnews.info

Retail sales going down

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In September, the turnover of retail trade in Russia fell down by 10.4% to 2.3 trillion rubles, according to the Russian Federal Statistics Service (Rosstat). This is the maximum decline in the past 15 years. In the first nine months of 2015, this figure decreased by 8.5% to 19.9 trillion rubles.

The previous record was registered by Rosstat in April this year, when the decline was 9.6%.

In monthly terms, retail sales in September decreased by 3%, that is the first decline since April 2015. In April, sales declined 2.6%, in May, they increased by 2.4%, in June – by 0.2%, in July – by 3.3%.

www.retailer.ru

Revenue of retailer “Lenta” grew by 33.8%

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FMCG-retailer “Lenta” published results for the first half of 2015. The revenue of “Lenta” grew by 33.8% up to 114.9 billion rubles in the first half of 2015. During the same period of 2014 the revenue was 85.9 billion rubles, LFL sales grew by 11.5% compared to the first half of 2014.

In the second quarter of 2015 the retailer has opened 4 hypermarkets and 3 supermarkets. The total number of stores “Lenta” as of June 30 totaled 143, including 116 hypermarkets and 27 supermarkets.

www.retailer.ru

X5 Retail Group continues to grow

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X5 Retail Group announced preliminary results for the first half of 2015. In January-June, retail sales increased by 27.3% compared to the same period of 2014 and amounted to 380.68 billion rubles. Sales of stores “Pyaterochka” increased by 35% up to 274.63 billion rubles, sales of stores “Perekrestok” – by 11.3% – up to 3 billion rubles, sales of stores “Karusel” – by 11.5%, tup o 37.3 billion rubles, sales of  stores “Express”-  by 17.8%, up to 5.68 billion rubles.

During 6 months, the average bill rose by 11.3% up to 373.9 rubles. The number of purchases increased by 14.3%, amounting to 1.16 billion items.

From the beginning of the year, X5 Retail Group opened 488 new stores (235 stores in the first half of the last year). In the end of June 2015, the company operated 5,971 stores (5,273 supermarkets “Pyaterochka”, 438 supermarkets “Perekrestok” and 83 hypermarkets “Karusel” and 177 stores “Express”).

www.retailer.ru

St. Petersburg Arbitration Court allowed to sell banned products

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The Arbitration Court of St. Petersburg and Leningrad region allowed to sell products banned by the Russian counter-sanctions.

“The government restricted import of certain products, not their sale. According to this, the restriction on sales of dairy products, including cheese, is not enshrined in law”, – judge Sinitsyna decided.

The Court considered the appeal of JSC “Tander” (Magnit retail chain), as in one in the stores cheese, produced in France, was found. “Tander” had to pay the fine for illegal sale of goods, free sale of which is prohibited or restricted. However, the court decided that the ban on the importation of goods is not equal to the ban on the sale of these products.

www.ria.ru