O'Key Group Q1 Results Show Strong Discounter Performance
Russian retailer O'Key Group has announced its unaudited operating results for Q1 2017, with increases from its discounters segment making up for decreases in other areas.
The group's net retail revenue increased by 0.5% year-on-year from RUB 42,586 million (€683 million) to RUB 42,797 million (€687 million). The group's net retail revenue growth rose to +4.9% in March.
Net retail revenue from its hypermarket and supermarket segment declined by 2.4% to RUB 40,641 million (€652 million). In March, net retail revenue in hypermarket and supermarket segment was +1.9%.
Net retail revenue at its discounter segment grew by 126.1% to RUB 2,156 million (€34 million) in Q1, driven by both new store openings and a higher sales density growth (79% year-on-year).
Like-for-like net retail revenue of hypermarket and supermarket segment decreased by 6.4% year-on-year. The deepest like-for-like decline was observed in January-February. In March, the decline rate slowed down to 2.5%.
Like-for-like net retail revenue at its discounters increased by 63.8% year-on-year, driven by a 41.6% increase in like-for-like traffic.
March figures were stronger than those for January-February. O'Key said this upward trend is continuing into Q2.
Future Plans And Predictions
O'Key expects its hypermarket and supermarket segment to grow in low single digits in 2017.
The retailer also plans to open at least 20 discounter stores in 2017 and two stores in the hypermarket and supermarket segment.
“The first two months were a particular challenge for us and we were affected by a challenging macroeconomic environment, slowing inflation, changing consumer behaviour," said Heigo Kera, chairman of O’Key Group, but added that discounters "continued demonstrating a good performance.”
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Gavin Ryan. Click subscribe to sign up to ESM: The European Supermarket Magazine.