X5 Retail Group

Azbuka Vkusa to Increase the Share of Private Labels to 30%

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Azbuka Vkusa food chain is planning to increase the share of private label items to 30% within the next few years. The majority of Russian retail chains have much smaller shares. The market leader X5 Retail Group has 12% in Pyaterochka, 6.5% in Perekryostok and 5% in Karusel and is planning to raise the share of private labels to 50%, 25% and 10% respectively. Azbuka Vkusa is also considering the opportunity of starting its own production of broilers. In the future the company will give its name to fruit, vegetables, meat, dairy and grocery products.

Source: www.fruitnews.ru

X5 Retail Group Reports Surge in FY Profits

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X5 Retail Group reported a strong rise in full-year profits, noting that net profits jumped up 64% to $271m. These results are due to the fourth-quarter performance, when profits nearly doubled to $88m. Meanwhile, full-year EBITDA was up 15% to $843.6m.

Earlier the company announced a strong rise in full-year sales. X5 continues to keep the average prices well below the country’s official inflation rate and provide considerable savings to Russian consumers. This approach supported strong like-for-like growth but put pressure on gross margin and EBITDA.

Source: www.freshplaza.com

The X5 Retail Group reported a strong rise in full-year profits, noting that net profits jumped up 64% to $271m. These results are due to the fourth-quarter performance, when profits nearly doubled to $88m. Meanwhile, full-year EBITDA was up 15% to $843.6m.

Earlier the group announced a strong rise in full-year sales. The company continues to keep the average prices well below the country’s official inflation rate and provide considerable savings to Russian consumers. This approach supported strong like-for-like growth but put pressure on gross margin and EBITDA.

Magnit Grows Faster than Х5

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The profit of “Magnit” in RUR terms grew by 53.15% in Q1 2011 y-o-y and reached RUR 75.3bn. In USD terms the profit increased by 56.4% to USD 2.56bn. Magnit’s profit in the segment of hypermarkets has doubled in Q1 2011 and reached RUR 8.86bn and USD 296.6m.

Magnit’s net retail profit in March 2011 grew by 53.75% y-o-y and reached RUR 27.3bn.
During January-March 2011 Magnit opened 134 outlets and the total number of stores grew to 4189. During the same period X5 Retail Group opened 76 new stores with the total number increasing to 2545.

Source: www.foodretail.ru

X5 Retail Group Reports Q1 2011 Trading Results

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X5 Retail Group N.V., Russia’s largest retailer in terms of revenue, announced its retail sales and operational performance for the first quater of 2011. Consolidated net retail sales increased 48% y-o-n in RUB terms to 111.989m and in USD terms 51% to 3.826m. 76 stores added on net basis in Q1 2011, including 80 soft discounters, 2 supermarkets, 2 convenience stores and closures of 8 Kopeyka stores. Net addition of selling space totaled 16,000 sq.m.
Andrei Gusev, X5 Retail Group CEO, commented:  “Sales grew 48% in RUB terms in the first quarter or 29% excluding Kopeyka, led by a strong recovery in supermarket LFL sales growth and sustained performance of discounters”.

Source: www.retailer.ru, www.investegate.co.uk

X5 Retail Group Changes Strategy

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X5’s largest shareholder, Alfa Group, is reportedly considering a merger with a large market player – namely Metro Group or Turkish Migros – in the next two years, Kommersant reported.

New CEO Andrei Gusev, who was previously head of X5’s M&A department, said that the retailer was not interested in an acquisition in its domestic market, a strategy which X5 has followed over the last five years.

With new management in place, X5 is changing its strategy. It plans to grow organically, partly because there is lack of acquisition targets in the Russian retail scene, but also because the retailer has a lot of debt.

Source: www.retailer.ru, www.foodnewsweek.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.

Grocery chains grow as recovery sets in

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With a total turnover in 2010 of 7.1 trillion rubles ($239 billion), the retail food market is growing at 13 percent — more than twice the rate of the economy as a whole — and leading retailers are seeing growth of 30 to 40 percent. However, the main driver for food retail growth is the growth of prices.

The X5 Retail Group, the largest food retailer, plans to open 540 new stores all over the country. Magnit, the supermarket chain with the greatest geographic coverage, is to open 800 convenience stores and 55 hypermarkets. Discount chain Dixy hopes to open 150 convenience stores in Moscow and the regions, and intends to attract customers with a new logo, more efficient operations, sales and discount cards.

This expansion will build on last year’s boom, in which X5 added 1097 new stores, including 660 stores via its acquisition of competitor Kopeika. Magnit opened 827 stores, compared with 646 openings in 2009. Dixy had 646 stores open in the end of 2010, up from 623 open the previous year. With last week’s purchase of rival Victoria Group supermarket chain, Dixy will own 901 stores. Sedmoi Kontinent had 146 stores at the end of the year mostly in and around Moscow, compared with 139 a year earlier.

X5’s net revenue for 2010 was 341.6 billion rubles ($11.2 billion). Magnit earned 7.1 billion rubles ($241 million) for the same period. But the market is highly fragmented, with none of the major players having more than 4 percent share, according to UralSib.

Source: www.themoscowtimes.com

X5 Retail to Launch Economy-Class Hypermarket

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X5 Retail Group has opened the first of its economy-class hypermarkets under the Pyaterochka-Maxi brand. Pyaterochka-Maxi is focussed on sales of food and non-food items to retail and wholesale customers. The main competitive advantage of Pyaterochka-Maxi is price leadership. It will offer the best prices by monitoring all competitors and meeting or beating them on every item. Wholesale bulk purchases will be entitled to an additional volume discount of 10-15%.
CEO Lev Khasis said: “This new economy-class hypermarket format will enable X5 to enter new markets and reach low income customers that are under-served by the competition.”

Source: uk.ibtimes.com

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