O'Key Group Q2 Performance Boosted By Discounter Segment
Russian retailer O'Key Group has reported that, year on year, net retail revenue increased by 4.9%, to RUB 41,793 million, in the second quarter of the year.
Net revenue from the group's hypermarket and supermarket segment grew by 2%, to RUB 39,313 million, while revenue from the discounter segment experienced an increase of 95.3%, to RUB 2,473 million.
Like-for-like group net retail revenue was almost flat year on year, as negative hypermarket and supermarket performance was largely offset by solid growth in the discounter segment.
Overall, group net retail revenue has experienced an increase of 2.6% year on year, to RUB 84,590 million, for the first half of 2017.
Net revenue for the supermarket and hypermarket segment was driven by an increase of 3.8% year on year, however, there was also a decline in shopper traffic due to growing competitive pressure, as well as unfavourable weather conditions in parts of Russia.
In the second quarter of 2017, O'Key opened one supermarket in Saint Petersburg and closed two hypermarkets, in Cherepovets and Sterlitamak, in line with the company's ongoing programme of 'store-portfolio optimisation'.
"In the reporting period, the team continued working on the assortment improvement, promotion strategy, and on-shelf availability," said Miodrag Borojevic, CEO of O'Key's hypermarket and supermarket segment. "These measures are expected to accelerate our traffic and average basket growth in the second half of the year."
Total sales for O'Key's discounter stores, DA!, grew to RUB 2.5 billion in the second quarter, driven by increases in both like-for-like traffic and average basket value.
"Our unique discounter concept is becoming increasingly popular with consumers, as more of them choose DA! as their destination store," said Armin Burger, CEO of the discounter segment.
"Focusing on the quality of our private-label brands, as well as improving the overall in-store shopping experience, has helped us to achieve outstanding like-for-like numbers. We expect to accelerate store openings in the second half of the year, in line with our guidance.”
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.