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Russia's X5 Retail Group To Increase Focus On Proximity Segment Following Strong Growth

Published on Jul 16 2020 10:10 AM in Retail tagged: Trending Posts / Russia / X5 Retail Group / Pyaterochka / Perekrestok / Karusel

Russia's X5 Retail Group To Increase Focus On Proximity Segment Following Strong Growth

Russia's X5 Retail Group has said that the proximity segment was the main contributor to growth in the second quarter of its financial year, with the business continuing to 'benefit from its strategic focus' on this area.

The group posted a 13.2% increase in net retail sales in the quarter, driven by a 4.3% increase in like-for-like sales, and 8.9% sales growth due to a rise in sales space.

Performance By Division

The group said that its Pyaterochka banner saw net retail sales increase 16.1% year-on-year, with like-for-like sakes growth of 6.0%.

Notably, like-for-like traffic was down 15.0% at the banner, while basket size increased by 24.8%, as shoppers visited stores less often but increased their purchases.

Sales at Pyaterochka picked up significantly in June, the retailer added, rising by 17.9% year-on-year, while the double digit growth trend has continued into July.

Perekrestok’s net retail sales increased by 12.6% in the second quarter, with this growth largely driven by an increase in selling space, and negatively affected by the closure of some public shopping malls.

Net retail sales at its Karusel business were down 34.3% in the quarter, due to a downsizing programme being instigated by the retailer as well as lower customer throughput.

Looking at the quarter on a month-to-month basis, X5 Retail Group saw sales up 16% in April, 11.1% in May and 12.5% in June.

Online Growth

Online sales surged as the COVID-19 situation developed, with online revenue from Perekrestok.ru and express delivery from Pyaterochka and Perekrestok stores totalling RUB 5.1 billion in the second quarter.

Due to capacity issues, X5 added a third 'dark store' in Moscow in April to support its e-commerce operations, which led to online sales in May alone reaching RUB 2.1 billion.

X5 expects Q2 2020 EBITDA margin to be above the Q2 2019 level, which was the highest level since Q2 2017, owing to strong quarterly sales led by the proximity segment, continued improvements in operational efficiency and better EBITDA margin for online operations driven by changes in demand during the COVID-19 lockdown.

© 2020 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

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