Page 13 - bne IntelliNews monthly magazine April 2025

bne April 2025 Companies & Markets I 13
Russia's leading discount store Fix Price to move into Serbia
Ben Aris in Berlin
Russian discount retailer Fix Price is preparing to enter the Serbian market, with plans to open several stores by the end of 2025, Kommersant reported on March 19.
This marks the company's second attempt to establish a pres- ence in Europe, following its operations in Latvia, where it currently runs 44 stores.
The company has posted job openings on the recruitment website HH.ru, seeking personnel for its Serbian expansion. Positions include an HR specialist responsible for build-
ing a team to promote the brand locally, as well as roles for
a chief accountant and senior legal counsel. An industry insider indicated that Fix Price aims to launch several physi- cal outlets in Serbia during the latter half of 2025, alongside initiating online sales, Kommersant reports. The company Fix Price confirmed its intention to enter the Serbian market but declined to provide specific details.
As bne IntelliNews reported the Balkans are booming and the move is significant as it highlights that the Balkans is becom- ing an increasingly attractive market as incomes levels rise and a middle class emerges.
The Balkans has seen a raft of western European retailers move into the market in recent years, led by the likes of Lidl that have been rolling out hundreds of stores to tap the increasingly affluent population.
First generation retail success stories
Fix Price is one of the most successful of Russia’s second generation of retailers that flourished in the increasingly tough years of this decade, capitalising on the years of reces- sion that follow the boom years of the noughties.
The first generation powerhouses such as the X5 Retail Group and regional supermarket giant Magnit grew rapidly at the end of the 1990s and the following decade as Russia emerged from the chaos of the Yeltsin-era and Russian President Vladi- mir Putin oversaw a decade of around 10% a year wage rises for public sector workers – about half the population.
Making money from retail in those years was easy and the race was on to simply capture as much market share as possible. Magnit, based in Krasnodar, took the early lead and surprised everyone as it ignored the affluent Moscow market and focused on rolling out a modern retail format in the regional cities. In the 1990s Russia was described as a country of two markets, “Moscow and everywhere else”, as most of the wealth was concentrated in the capital. Magnit’s success was
due to catering to the lower income bracket in the regional cities that remained largely ignored but which was a signifi- cantly larger market in terms of the number of customers.
After Magnit’s IPO in April 2006, the company became
a “tourist stock” with a large share of international equity investors with exposure to Russia buying its shares, as it was seen as largely apolitical and gave exposure to the rising living standards of the entire population.
The fairy tale came to an end after a boardroom bust-up amongst leading managers over strategy and the decision of Magnit’s founder, Sergey Galitsky, to sell his controlling stake to state-owned VTB Bank in a controversial deal that was called a "spit in the face" for minority investors, as it was structured in such a way as to avoid a mandatory buy-out of minority investors’ shares that gipped them out of millions of dollars.
From then X5 took over the baton as Russia’s most success- ful retail chain with its ownership of Pyaterochka, a discount convenience store chain with thousands of locations across Russia, Perekrestok, a mid-range supermarket chain offering a wider selection of products, and Karusel, a hypermarket format.
Fix Price disruptor
Fix Price is a countercyclical business: the worse the Russian economy does, the better Fix Price performs as shoppers are willing to make more effort to save money.
The post-boom years in Russia were tough. Real incomes stagnated or fell for years in the first half of the last decade.
Russia's leading discount store set to expand into Serbia to tap into the growing Balkan boom. / bne IntelliNews
www.intellinews.com