X5 Retail Group

Fresh Foods Russia 2012: Results

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The 3d Business Forum – Fresh Foods Russia 2012: Fresh products and ready-to-eat food  in modern retail networks – was held at Borodino hotel on 22-23d of November.

Fresh Foods Russia is the only business event in the country, bringing up to light the questions of quality and assortment of fresh products, purchase and storage, organizing of in-house manufacture, and also fresh and ultrafresh products as the main weapon in networks’ competition for the buyer.
More that 250 participants from 50 different cities and countries, including Ukraine, Belorussia, Moldavia, Italy, Spain and France discussed how to satisfy the growing demand and requirements of a consumer to the quality of fresh products, how to make the trading space look “tasty”, fresh and effective, how to provide marginality of sales, and make the supply chain steady during season  hesitations, and other up to date issues.
Traditionally, before the opening of the forum, a press-conference was held, on “Russian consumer in search of fresh and eco-products. The readiness of retail networks and producers to deliver quality and safety of fresh products, as well as their certificates”.
In discussion of the general vision of “fresh” and “eco” categories, Alexander Konovalov noted that today the notion of “eco products” is not yet legitimated, and a new law regarding organic agriculture is being developed in the Government. Alexander also added that by the results of 2012 the volumes of “eco” market will compose 100 mln $, only 15% of which is a share of Russian manufacturers.
In the session “Figures and facts” the leading analytic agencies presented their reports about the development of fresh food category. Among the main trends the experts noted an average growth of money which households spend on fresh categories and house brands. Sergey Yashko, vice General Director if GfK Rus, presented the following observations: almost 60% of all expense by the consumer are spent on fresh products; the share of fresh products purchase in traditional trade channel is higher then in contemporary channel: in traditional trade the consumer’s basket is shifted towards such categories as meat/fish and vegetables/fruit, and in contemporary channel – to dairy categories; 27% of all food shopping made by Russian families consist of fresh products exclusively, and the most actively developing is the segment of cooled/fresh fish (+28%). The main contribution to this growth was made by the traditional trade channel (+31%).
The opening of the Forum was a plenary session called “Where to get quality?!”, that took place in the big hall of “Borodino”. Market leaders: Belaya Dacha, Globus Gourmet, RusProdSoyuz, X5 Retail Group, Akort, Ecocluster – raised the problems of qualityof fresh products, and the possible ways of handling them through regulating the market and relations between suppliers and retailers, and development of logistics and systems of storage and manufacturing.
Speaking about quality, Nikolay Vlasov, vice president of RossAgroSurvey, expressed an opinion that the requirements to certification of products on the judicial level should be as light as possible, in order not to break the rules of competition. The networks in their turn should have an ability to certify the production additionally. Unfortunately, as notes Mr.Vlasov, the current  legislation does not imply any responsibility for giving untruthful information in this sphere, which makes the process of fight with unfair market members ever more difficult.
During the first plenary session, the companies shared their plans for the future, in particular, – Belaya Dacha will launch a plant in Saint-Petersburg, and plans to construct a manufacture in Rostov region – informs Victor Semenov, the founder of the company. Globus Gournet network is regarding proposals for opening new shops not just on the territory of Moscow and Saint-Petersburg, but also considers attractive such regions as: Ekaterinburg, Novosibirsk, Rostov-on-Don, Krasnodar and Sochi.
Among the main topics of the two days of the business-forum the delegates pointed out the following sessions: “Perspective technologies in supplies management (takeover, transhipment, quality control and logistics of fresh and ultrafresh; safety management for products); “Sales concepts of ready-to-eat food (Food-to-go bistros and other formats of trade organization inside the trading hall)”; “Fresh is not a mere gift – how to manage the marginality level”; “Staff that makes products tasty for consumers”; “Development of a private manufacture in a shop (system of kitchen-factory work)”.

The second day of the program was opened by the commercial negotiations of supplies between purchase leaders of retail networks and manufacturers in categories “Fruit/vegetables”, “Dairy”, “Meat/fish/poultry”, “Bread and Bakery”, and also between suppliers of equipment and products for private manufacture, and Heads of Self-produced food Departments in retail networks. The participants of negotiations were: Dixi, Spar Central Russia, Metro Cash&Carry, Vernyi, X5 retail Group, Hyper Globus, TZS System, Bakhetle, O’KAY, Myasnov, Titan, Continent of Taste, Food House, Proviant, Partner-Market, Anix, Palace row, Krasnyi Yar, Makarovskyi, Holiday Classic, Smak, Rost, Horizon, Comandor, Slata, Spar Middle Volga, Lentorg, Gulliver, Karavay, Lama, Molniya (SPAR Chelyabinsk), Guarant of Taste, Soyuz, Svetlyachok, Yelisey, KAK RAZ, Taste House, Telex, Radezh, Intertorg (National Family, Idea, Spar), Kulinarium, RegionMart System (Polyana, Chibis), Samberi, Ukrainian Retail, South Central Prod.
A special Surprize for the Forum delegates were business-trainings: how to control oneself, how to control one’s negative feelings, how the mood influences one’s relations and subordinates – these are the skills that the members could learn at the personal growth workshops. Timur Yadgarov , Head of Leadership Board in High School of BBCG and Vyacheslav Frolov, founder and director of “Business theatre” at MAAT studio school, shared their practice and psychological skills of self-presentation, necessary in the hard job of top-managenent.
Fresh Food Russia 2012 Forum was closed with the speech of special guest Tom Wolf, a world-famous food designer and chief cook, one of the most famous food designers in the world, and founder of  London catering company Blue Food Productions, organizing creative fourchets for celebrities and world premieres, such as “Pirates of the Carribean” and “Alice in Wonderland”. Progressive thinking, new solutions for restaurant areas in supermarkets, and a creative approach to food raised acute interest among the retailers. But few members of the market are now ready to implement such brave ideas in Russian retail yet.

Source: www.fruitnews.ru

Meeting of Rosselkhoznadzor officials and Russian retailers

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November 12, 2012: Rosselkhoznadzor organized a regular meeting dedicated to the “safety of plant products supplied to retail chains” with the representatives of organizations engaged in the sale of plant products.

The meeting was dedicated to discussing ways to improve the safety of plant products supplied to retailers. Among the participants were senior officials of Rosselkhoznadzor, representatives of X5 Retail Group LLC, Real Hypermarket LLC, Metro Cash & Carry LLC, Lenta, Okay, Belaya Dacha Trading JSC, National Agricultural Union.

The representatives of trade organizations acknowledged the need to develop a unified form to accompany the incoming plant products as it moves through Russia and the Customs Union. The meeting agreed on the need of development and short-term harmonization of such document.
The meeting resulted in a protocol on “Security of plant products supplied to retailers”

Source: www.fruitnews.ru

Retail chain “Vernij”

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In 2013 retail chain “Vernij” (which means “Loyal” in Russian) will launch the option program – top-managers will be offered up to 5% of the share capital of the company as a reward for good work. This program may be the most generous on the Russian food retail market – usually that number is up to 2% of the share capital.

Andrei Rogachev, founder of retail chains “Pyaterochka” and “Karusel”, and former managers of X5 Retail Group, the former CEO of “Pyaterochka” Oleg Vysotsky and the former head of the Ural branch of X5 Alexei Vaganov now are investing in the development of retail chain “Vernij”.

According to the development plans, there will be up to 400 stores in Moscow and St. Petersburg in three years. Now there are more than 10 stores and another 25 stores will be opened by the end of the year.

Source: www.retailer.ru

Magnit eyes Siberia as pushes deeper into regions

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Russia’s No.2 food retailer Magnit by sales, is targeting Siberia as it presses on with a rapid expansion into the country’s regions which it believes can deliver at least another four or five years of strong growth.

Sergei Galitskiy, who opened his first shop in 1998 and has built Magnit into a 6,000-store empire, told Reuters he would stick to a winning formula of targeting low- to middle-income shoppers through mostly convenience stores.

Magnit turned over $11.4 billion in 2011, compared with $15.5 billion at Russian grocery leader X5 Retail.

But it is currently growing three times as quickly as it opens three stores a day and as X5 struggles with its shift away from acquisition-led growth and underperforming hypermarkets.

Magnit expects revenue growth, which has run at an annual rate of around 40 percent in recent years, to slow to 30-32 percent this year and gave preliminary guidance last month that it would ease further to 25-27 percent in 2013.

Magnit is grabbing business in towns from outdoor markets, kiosks and independent shops. It plans to add 800-1,000 convenience stores, up to 60 hypermarkets and 500 cosmetic shops next year – similar to the expansion this year.

Source: www.reuters.com

X5 Sees Hypermarket Decline While Convenience Stores Format is Growing

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Russian retail group X5 has reported consolidated net retail sales growth of 10.4 per cent,X5 Retail Group Russia logo and a decline of 0.7 per cent in like-for-like sales for the three months to the end of September.

The group’s third quarter hypermarket sales decreased by 9.9 per cent year-on-year, which it attributed to the cancellation of the chain’s loyalty program in February and the negative impact of the format’s like-for-like sales, which dropped 12 per cent.

The convenience format performed well with sales up 74.3 per cent, and 11.6 per cent on a like-for-like basis. Supermarket sales were down 5.9 per cent, as its like-for-like sales declined by 2.7 per cent. X5’s soft discounter operations reported a 15.9 per cent sales increase, 2.6 per cent on a like-for-like basis.

The group increased its net sales space by 8 per cent in the first nine months of the year and added 174 stores in the third quarter, 157 soft discounters, nine supermarkets and 14 convenience stores, bringing its total to 3,472.

Source: www.esmmagazine.com

X5 reports third quarter results

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Russian retailer sees consolidated net sales climb, although like-for-like sales fall 0.7 per cent

In Russia, X5 Retail Group has announced that its consolidated net sales jumped 10.4 per cent through the third quarter of 2012, climbing to RUB116bn (€2.8bn), driven by sales growth at Pyaterochkas, organic store growth at supermarkets and ongoing promotional activities.

However, the company’s like-for-like sales for the quarter dropped 0.7 per cent, as customer traffic fell 2.5 per cent, although there was an increase in like-for-like sales at convenience stores of 11.6 per cent.

Indeed, small-store formats such as Perekrestok Express and Pyaterochka outperformed the larger outlets such as Perekrestok supermarkets and Karusel hypermarkets, the group noted.

Source: www.fruitnet.com

X5 Retail Group is developing discounter Kopeyka

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X5 Retail Group has begun to develop the brand of discounter “Kopeyka” instead of developing the same format under the brand name “Pyatorochka mini”. All seven discounters “Pyatorochka mini” were rebranded as “Kopeyka.”

Small supermarkets show the most dynamic growth in X5 Retail Group revenues. The company bought “Kopeyka” from “Uralsib” owner Nikolai Tsvetkov in the end of 2010. There were more than 600 discount stores. In 2011, the retailer decided what to do with the trademark, even considering the option of selling it, but in the end they began to develop it.

Now there are 20 stores in Moscow and the region. The average area of these stores is 200 square meters, number of products is 3,000-3,500.

Source: www.retailer.ru

More Green Perekrestok supermarkets

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X5 Retail Group may open up to ten “Green Perekrestok” in St. Petersburg according to Valery Tarakanov, CEO of the supermarket network “Perekrestok”.

I do not see direct competitors in St. Petersburg, – Valery Tarakanov said. In Moscow, our competitors are «Azbuka Vkusa» and “Globus Gourmet”.

At first we need to test the new format in St. Petersburg, and then make specific decisions to launch other supermarkets, – Elena Gulyaeva, Operational Director of “Green Perekrestok”, said. – The test period of the store is usually six months or a year.

By the end of the year another premium network “Azbuka vkusa” is to be opened in St. Petersburg.

Trade area of first Petersburg “Green Perekrestok” is 800 square meters, 40% of products are exclusively presented in the supermarket. Also there is a bakery in the store.

Now there are 13 supermarkets “Green Perekrestok”, including one in Rostov-on-Don, the rest are situated in the Moscow region.

According to Elias Strom, CEO of premium supermarket “Land”, in St. Petersburg there are all the resources for the development of networks in the segment.

On June 30, 2012 X5 Retail Group owns 3,298 stores, including 2,783 discounters, 341 supermarkets, 77 hypermarkets and 97conveniece stores.

Source: www.retailer.ru

Supply Chain Changes At X5

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X5 Retail Group Russia logoThe X5 Retail Grouphas reported some changes to its supply chain management. The Russian food retailer is to directly import and distribute a number of product categories into its stores. The group currently distributes mostly fresh produce and confectionary to its retail outlets. Importing goods directly will eliminate the need for a distributor and will improve the group’s gross margins and product quality, chief financial officer Kieran Balfe is reported to have said.

Source: www.esmmagazine.com

 

Changes of X5 Retail Group

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A month ago Andrei Gusev resigned CEO of X5 Retail Group; and last week Alexander Ermolenko, director of logistics, who had began to work for X5 Retail Group after quitting “Magnit” more than a year ago, and his deputy Vyacheslav Mikhnenko, who before had worked for retail network “Kopeyka”, resigned their positions as well.

In the result, Igor Sotnikov, who previously worked as director of logistics for supermarket format, was appointed director of logistics of all the formats of X5 stores.

Also Ian Fuchs resigned director of hypermarket format of X5 Retail Group. He was appointed to the position in November 2011.

Last week the information appeared that X5 Retail Group is negotiating the purchase of Stavropol retail network “Troyka” and “Sem’ja”. As a result of the transaction, X5 can get 12,000 square meters of their stores in Stavropol region and Karachaevo-Cherkesskij region or some stores located in Stavropol and Nevinnomyssk. So far, X5 does not have its own stores in Stavropol region, and, according to some experts, it can spend 300-700 million rubles for the entry to the region.

Source: www.retailer.ru