X5 Retail Group Sees Digital Sales Rise More Than Threefold In 2020
Russia's X5 Retail Group said that sales across its various digital platforms rose by 362% year-on-year, driven by the coronavirus pandemic.
The group's digital arm, which includes Perekrestok Vprok, express delivery and 5Post, posted sales of RUB 20.1 billion (€220 million) for the year.
Online hypermarket revenue rose by 207.9% year-on-year, it added.
"Our performance in 2020 shows that we chose the right strategic path several years ago, when we began to focus on digital transformation of our business," commented X5 chief executive Igor Shekhterman.
"Thanks to our robust IT infrastructure and new digital services developed for our customers, we were able to adapt quickly to the unprecedented changes in consumer demand as a result of the COVID-19 pandemic and rapidly scale up Perekrestok Vprok and express delivery services."
Overall, X5 Retail Group saw a 14.3% increase in sales for the year, driven by a 5.5% increase in like-for-like sales, and a 8.8% contribution from additional retail space.
Sales in its bricks and mortar Pyaterochka and Perekrestok businesses were up 16.5% and 13.9% respectively, with the retailer saying that proximity stores performed the strongest, ahead of its supermarkets and hypermarkets.
"Our core offline operations delivered strong results throughout the year, supported by new store concepts for both Perekrestok and Pyaterochka, expansion of our own ready-to-eat assortment and constant focus on efficiency," Shekhterman said.
"Robust business processes enable us to quickly roll out safety procedures across our operations, helping to protect the health of our customers and employees."
The group added 1,410 net new stores to its portfolio in 2020, while 583 proximity stores and 46 supermarkets were refurbished in line with a new operating concept. The year also saw 24 former Karusel outlets transferred to the Perekrestok banner.
In terms of the like-for-like sales performance of X5's individual banners, Pyaterochka was the strongest performer, with a 6.9% increase in LFL – traffic was down 4.6%, while basket size was up 12.1%.
Elsewhere, Perekrestok saw a 1.2% increase in like-for-like sales, with traffic down 14.6% and basket size up 18.4%, while Karusel was down 7.7% in like-for-like terms, with traffic down 18.7% and basket size up 13.5%.
The group also saw a strong end to 2020, with 2021 already off to a good start, Shekhterman added.
"Trading in December and January has remained strong: during the last two weeks of December 2020, X5's net retail sales increased by 12.3% y-o-y (16.0% y-o-y for Pyaterochka). In 2021 year-to-date, net retail sales growth accelerated to 12.4% y-o-y (15.1% for Pyaterochka)," he said.
© 2021 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.