April 19, 2018 / 8:58 AM / in 6 months

Deep freeze bites into Russian retailers' sales

MOSCOW, April 19 (Reuters) - Russian food retailers X5 and Lenta said on Thursday their sales growth slowed in the first quarter due to unusually cold weather.

Sales at X5 grew 20.2 percent year-on-year in the first quarter after a rise of 23.4 percent in the previous quarter. Lenta said growth slowed to 19.9 percent from 23.4 percent.

“Unusually cold weather in Russia (seven degrees Celsius colder than the average for the previous three years) and several major snowstorms affected (customer) traffic in February and March,” X5 said in a statement.

Lenta said its performance in March was much improved.

Russian footwear retailer Obuv Rossii also blamed the harsh winter for a sales drop.

The start of the year was already challenging for the sector due to pressures from falling inflation. Inflation in Russia was expected to be at record lows of below 4 percent in 2018.

X5, Russia’s biggest food retailer by revenue, added that consumer behaviour remained highly sensitive to promotions and said last year’s base for comparison was boosted by a one-off pension payment that led to extra spending.

Like-for-like sales at X5 were up 0.5 percent year-on-year with a 2.2 percent rise in the average price helping offset a 1.6 percent drop in customer traffic.

Lenta said its like-for-like sales increased 6.1 percent as its average price rose 5.5 percent and traffic climbed 0.6 percent. (Reporting by Maria Kiselyova; Editing by Elaine Hardcastle)

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