Russia's O’Key Group Sees Net Revenue Up 4% In First Half
Russian retailer O’Key Group has reported a 4.0% year-on-year growth in net retail revenue to RUB 87.7 billion in the first half of its financial year ended 30 June 2021.
Discount chain DA! saw net retail revenue increase by 23.9% year-on-year to RUB 15.6 billion, driven by a 10.2% LFL net retail revenue growth and a selling space expansion.
Net retail revenue in O’Key hypermarkets grew by 0.5%, to RUB 72.1 billion, compared to the same period last year.
Online sales grew by 62.6% year-on-year in the first half to RUB 2 billion, accounting for 2.8% of O’Key’s revenue.
The company continued the transformation of its hypermarket business to improve customer service and shopping experience in this period.
The company’s second-quarter net retail revenue amounted to RUB 44.4 billion, up 6.1% compared to the same period last year, while LFL revenue grew by 1.2% year on year, with both hypermarkets and discounters delivering positive LFL performance.
DA! Reported a 21.4% growth in net retail revenue, to RUB 8.4 billion, driven by a 6.8% LFL net retail revenue growth and a 19.5% year-on-year growth in sales area.
The discount chain’s share in the group’s revenue rose by 2.4 pps year-on-year to 18.9%.
Commenting on the performance of the DA! discount chain, chief executive of O`KEY Group, Armin Burger, said, “Today, DA! is the only food discounter in Russia that successfully operates a business model based on a unique private label portfolio.
“We plan to bring the number of new openings at DA! up to 35–40 annually, starting this year. We see discounters as the main driver of the group’s revenue and profitability growth in the medium term.”
During the quarter, net retail revenue from O’Key hypermarkets amounted to RUB 36 billion (+3.1% year-on-year).
The share of fruit and vegetables, fresh and ultra-fresh categories in the hypermarkets’ revenue was 52.0% in the second quarter of 2021, the retailer added.
Private-label brands accounted for 7.7% of O’Key’s and 50.2% of the discount chain’s net retail revenue in this period.
In June of this year, O’Key Group has expanded its network in central Russia by acquiring a Karusel hypermarket in Moscow in Ozernaya Street.
In July, Expert RA confirmed a credit rating of ‘ruA-’ with a stable outlook for O’Key LLC – the main operating subsidiary of O’Key Group S.A.
The company also confirmed its previously announced guidance for 2021 of a low-single-digit LFL growth at O’Key hypermarkets and a double-digit LFL growth at DA! discounters.