Page 108 - RusRPTNov18

acceleration in the construction of the M-11 road.
9.2.5 Retail corporate news
One of the leading Russian retailers, Magnit , held a two-day capital markets event and presented its long-term transformation strategy . The company aims to boost total market share in Russia to 15% by 2023 (from 9% in 2017) with key focuses on the Moscow, Volga, and Siberia regions. Magnit has been staging a comeback as Russia's biggest retailer, after falling behind its rival X5 Retail Group , and has recently revamped its management team , included hiring the former CEO of X5’s Pyaterochka supermarket chain, Olga Naumova, as its executive director. The retailer unveiled an aggressive store growth target, planning to increase the number of proximity stores to 22,800 (from 13,000 currently), Magnit family stores to 900 from 500, Magnit cosmetics stores by 4,000 to 9,300 stores in 2023, and other formats by 9,000. The next steps in the strategy include the launch of a multi-format loyalty programme pilot by the first quarter of 2019, and developing an omni-channel concept by the second quarter of 2019. "Overall we deem the strategy neutral as the turnaround will take time to materialise (while management estimates that the first results will be visible in 4Q18-1H19, the strategy's timeframe is five years)," Aton Equity commented on September 29,
Russian electronics retailer Eldorado plans to rebrand into a more affordable "cash and carry" type store , Vedomosti daily reported citing the marketing director of the company Vasily Bolshakov. The new slogan of the company will be "Eldorado --People profit". Eldorado was recently merged with M.Video , both companies are controlled by Russian Safmar Group of billionaire Mikhail Gutseriev, creating an unrivalled national retail champion as big as any company in the rest of Europ e. The Eldorado part of the merged retailer will from now continue to open large stores with 1,000 to 1,200 square meter surface, but the outlets will now have a cheaper shop-storage format. It will also add mini-format stores with limited assortment of most popular products. Eldorado hopes to boost the turnover by 20% due to both higher average receipt and higher customer traffic, while capital spending per opening is expected to decline by 15-20%. By the end of 2018 Eldorado plans to open 25 new stores, most of them of mini-format, with priority territories being south and Far East districts, Moscow and the Moscow region, and St Petersburg.
French retailer Auchan continues to lose positions in the ranking of retailer in Russia as local supermarket chain Dixie over took it in terms of turnover, Vedomosti d aily said on October 24 citing a market study by Infoline. Auchan is now smaller than Dixie, Lenta, Magnit and market leader X5 Retail Group that operates the Pyaterochka, Perekrestok, and Karusel brands. Auchan launched in Russia in 2002 and by 2012 the market became the firm’s second largest after France. But in the past years Auchan has been hit by a mixture of systemic internal crises and the downfall of the hypermarket format . There has been a systemic shift from the large scale formats to more local retailers that have caught up and pushed the foreign competitors, such as recent acquisition of German MediaMarkt by electronics retailer M.Video . Previously in May 2018 Auchan said it plans to move upscale and boost the number of quality choices in its product basket and increase the traffic, which is estimated by Infoline at 2.2% in 2017. The market share declined from 2.9%, attributed to the loss of the middle class shopper turned down by large proportion of cheapest products on Auchan shelves.
108 RUSSIA Country Report November 2018 www.intellinews.com