Russian retail market

LENTA opens sixteenth supermarket in Moscow

Written by

LENTA, one of the largest retail chains in Russia, announces the opening of the sixteenth supermarket in the Moscow region. New supermarket opened in Moscow at the address: 2A Guryanova Street.
Total area of the store is 1857 sq.m, 50% of which occupied by retail space. Supermarket is open 7 days a week from 8am to 11pm. The stock of goods available at the shop exceeds 6500 items. Along with the wide production range of federal brands, products from local manufacturers are offered to the customers.
For visitors’ convenience, there is a parking area for 70 cars, and the trading ground is equipped with 10 cashier desks.

With the opening of this new hypermarket, the network LENTA includes 87 hypermarkets in 50 cities of Russia and 16 supermarkets in the Moscow region.

www.freshplaza.com

Russia’s X5 Retail Group posts 71 pct rise in Q2 net income

Written by

Russian supermarket operator X5 Retail Group NV said on Thursday its second-quarter net profit rose 71 percent, year-on-year, to around 4 billion roubles ($111 million).

Earnings before interest, taxation, depreciation and amortisation (EBITDA) increased 24 percent to 11.4 billion roubles with an EBITDA margin at 7.3 percent compared with 6.9 percent a year ago, the company said in a statement.

(1 US dollar = 36.0290 Russian rouble)

www.freshplaza.com

Metro could restart Russia IPO preparations in September

Written by

German retailer Metro could restart preparations in September for the stock market listing of a quarter of its Russian cash-and-carry wholesale operation that it postponed due to the Ukraine crisis, sources close to the matter said.

Company and financial sources said relaunching the initial public offering – which had been expected to fetch at least 1 billion euros – would depend on developments in Ukraine and the level of the Russian rouble.

Metro, which wants to use the proceeds to invest in the fast-growing Russian business and other emerging markets and pay down debt, decided in March to delay the stock market listing due to market turmoil over Ukraine.

Metro declined to comment but Chief Executive Olaf Koch has said in the past the planned IPO had been well received by investors and should still proceed if the turmoil on Russian markets abated.

Metro is Russia’s fourth-biggest retailer behind X5, Magnit and French chain Auchan. Its Russian unit made a quarter of Metro’s group operating profit in 2013 with sales of about $5 billion, some 9 percent of Metro’s total.

www.freshplaza.com

Perekrestok To Drastically Change Appearance

Written by

The network of chain stores Perekrestok is getting a new look, as reported by Vedomosti, quoting Janusz Lella, the general director of the company.

Lella said, according to the publication, that the need to change the way the company appeals to consumers came about because of its low financial performance.

In the future, Perekrestok is looking at changing the use of its staff, changing its logo and revising its pricing policy.

“The supermarkets are changing their logo and color scheme, reorganizing their assortment, it will be newly organized as well as the retail space in the stores, in addition to a revised personnel policy,” he said.

During the first quarter of this year, the network reached a revenue of 28.7 billion rubles ( about $833 million ), and the group of companies reached 144 billion rubles ( about $4,18 billion ). Perekrestok’s growth performance was at 4.4 percent.

“We deliver suppliers more. The growth of the purchase amount is due to buying more goods, therefore sometimes even lowering prices gives rise to an average bill,” he said.

From January to March of this year, the average customer check at Perekrestok amounted to 433.8 rubles ( about $13 ).

www.fruitnews.info

Magnit fined $581 for endangering consumer health

Written by

Administrative sanctions have been brought against the Magnit supermarket chain, which is owned by Tander, for numerous violations threatening the health of consumers. Charges brought against the company for violations of sanitary regulations were found to be justified by the Arbitration Court of St. Petersburg and the Leningrad Region, Fonatank.ru reported on June 14.

Supermarkets in the Magnit chain were inspected in Autumn 2013 according to a schedule agreed upon by prosecutors. Federal Service for Supervision of Consumer Rights Protection and Human Well-Being inspectors in St. Petersburg found evidence that the chain was selling substandard product, including rotten cucumbers and fish. An examination of cranberries sold by Magnit revealed the presence of cesium-137 in levels of up to 320 becquerels per kilogram.

The company denies the charges. The director of the St. Petersburg branch of Tander Vladimir Dubinin argued that most of the health department violations had not been documented. He rejected the findings of the supervisory authority on the sale of substandard product. “The official documents do not conform to current legislation,” Dubinin told Fontanka.ru.

www.freshplaza.com

Azbuka Vkusa adds a new format

Written by

The retailer Azbuka Vkusa announced launching new format of supermarkets – AV Market. As it has been known from Vedomosti newspaper Andrey Tkemaladze is going to be a director of the new chain of supermarkets.

According to the top manager, 5 hypermarkets, which Azbuka Vkusa gets as result of a deal with Spar, are going to be rebranded by the end of the year. Complimentary to rebranded Spar hypermarkets this year another 5 new hypermarkets will be opened: 3 – in Moscow, 2 – in Moscow region. The retailer is planning to open not less than 5 new AV Market hypermarkets per year.

When developing this new format supermarkets Azbuka Vkusa was deeply learning a background of USA supermarket networks such as Wegmans, Whole Foods, Trader Joe’s.

Target market of AV Market is going to be wider than usual Azbuka Vkusa has. The retailer wants to carry out a new format – a market inside a store, where customers can bargain and get a discount depending on goods’ amount.
An average bill will be around 1000 Rubles and that is 1.5 lower than in usual Azbuka Vkusa supermarkets, but higher than in other super- and hypermarkets.

A product assortment is going to consist of 15,000-20,000 names. Groceries will take 10-15% of the whole amount of product assortment. A share of fresh products will take 50% of whole assortment. It is planned to create few in-store cafes, but it will depend on store square.

AV Market is going to be an anchor renter in shopping malls: minimal selling area of AV Market will take 2000 square meters, maximal – up to 10,000 square meters.

www.retailer.ru

Magnit and Lenta conquering Siberia

Written by

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

Written by

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

Magnit plans an expansion in Siberia

Written by

Experts made a forecast about a boost in development of supermarket network Magnit in Siberia. This forecast is based on a launch of a new distribution warehousing center with a total square of 20 000 m2 in Novosibirsk. In future it will help “Magnit” to increase profit and a number of salepoints in Siberia.

The positive reaction of investors is explained by new logistics capacity. It will help the company to extend its presence in Siberia and to accelerate the pace of development of the supermarket network itself. This will positively influence the dynamics of the company’s profit growth.

It is to be recalled that in the end of 2013 Magnit owned only one distribution warehousing center in Siberia – in Omsk Region. It is expected that Magnit is going to start an active expansion in Siberia after creating the necessary logistic structure in Novosibirsk Region.

According to the Magnit’s plan of expansion, 1500 new salepoints will be opened in 2014, which is more than in 2013 by 291 salepoints.

www.retail.ru

Russian retailer Lenta undeterred by Ukraine crisis

Written by

Jan Dunning, CEO of St Petersburg-headquartered hypermarket chain Lenta, says the situation in Ukraine has had no impact on the group, as consumer confidence remains unaffected in Russia.

The breakaway of Crimea from Ukraine marked a key pressure point in the crisis, after the region’s residents voted overwhelmingly in favor of joining Russia.

Dunning said that consumer demand in Russia was unaffected by the ongoing conflict with Ukraine, but that Western sanctions on the country had weakened the rouble. Over the year-to-date, the dollar has risen almost 8.5 percent against the Russian currency. As a result, Lenta was looking to source products from within Russia, or from China.

Also on Thursday, Lenta reported robust sales growth of 37.3 percent for the first quarter, during which the chain opened two new hypermarkets. Dunning said Lenta’s expansion plans were undeterred by the Ukraine-Russia turmoil, with plans to open 24 hypermarkets and 15 supermarkets in 2014.

www.cnbc.com