Russian Retailer Lenta Sees Decline In Like-For-Like Sales In Third Quarter
Russian retailer Lenta has posted a like-for-like decline in sales of 0.5% in the third quarter of its financial year, excluding VAT.
The retailer saw a like-for-like traffic decline of 2.0% in the period, however the average transaction value rose by 1.5%.
Total sales in the period fell by 0.4% to RUB 100.4 billion (€1.42 billon), down from RUB 100.8 billion a year earlier.
This included retail sales growth of 2.9% (to RUB 97.8 billion) and a decline in the group's wholesale business of 55%.
“The third quarter of 2019 was another challenging period for the food retail industry," commented Lenta chief executive Herman Tinga. "The market remained very price-competitive due to the weak macroeconomic environment, combined with the rapid expansion of retail chains.
"Consumers continued to be price-sensitive with more options around for making daily grocery purchases, while the retail chains have been focused on driving customer traffic by enhancing promotional activity."
Lenta opened one new hypermarket in the period, to bring its store count to 375 – including 246 hypermarkets and 129 supermarkets.
The period also saw the group open a representative office in St Petersburg, with CFO Rud Pedersen appointed head of this office.
Tinga added that the group has been "working to enhance our shopping experience", as well as investing in logistics optimisation.
"In October we closed one leased distribution centre in Moscow and replaced it with a new facility with total space of around 70,990 square metres, which became the largest distribution centre in Lenta’s portfolio," he said. "Simultaneously, we are still in progress of shaping a new strategy, which should help us to open the door into a new era of Lenta’s development."
© 2019 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.