March 27, 2017 / 4:09 PM / 10 months ago

Russian retailer X5 plans to open another 2,000 stores in 2017

* To keep expansion pace after record new stores in 2016

* Aims to increase market share to 15 pct by end-2020

* Net retail sales up 26 pct y/y so far in 2017

MOSCOW, March 27 (Reuters) - Russian food retailer X5 said it aims to match last year’s record 2,000 store openings in 2017 as part of plans to almost double its market share in the next four years.

The company, which at the end of 2016 overtook Magnit as Russia’s biggest food retailer by sales, is targeting a 15 percent share of the market by the end of 2020, up from 8 percent now, under a plan announced last year.

“We are now working towards this ambitious target. On the subject of openings this means that we should maintain the current level of growth in absolute terms,” Chief Executive Igor Shekhterman said on Monday. He was speaking on a conference call after X5 announced a 15.6 percent rise in fourth-quarter net profit to 2.4 billion roubles ($42 million).

The retailer, just under 50 percent owned by Russia’s Alfa Group - an investment vehicle of billionaire Mikhail Fridman and his partners - opened 2,167 stores in 2016, compared to 1,537 in 2015, despite weak consumer spending in Russia.

It will open “2,000 plus” stores in 2017, Shekhterman said.

Russia’s economy is expected to return to growth this year thanks to the recovery in oil prices, after two years of economic recession.

X5’s retail sales were up by around 26 percent so far this year on a year ago, Chief Financial Officer Dmitry Gimmelberg said.

On a like for like basis though, excluding new stories, sales were up 7 percent and Shekhterman said consumers were still cautious.

“To date, in the current year, things remain in line with last year’s trends. Customers remain extremely rational and continue to seek out the best prices and promos,” Shekhterman said.

X5 would remain focused on organic growth and maintaining margins, he said.

The retailer said on Monday that earnings before interest, taxes, depreciation and amortisation (EBITDA) jumped 48 percent to 19.9 billion roubles in the fourth quarter.

Its EBITDA margin increased to 6.8 percent, from 5.8 percent a year earlier.

New stores helped X5’s retail sales jump 27.5 percent for the whole of last year, driven mainly by the group’s low-cost Pyaterochka stores. ($1 = 56.9900 roubles) (Reporting by Maria Kiselyova and Olga Sichkar; Editing by Susan Fenton)

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