Russia's X5 Retail Group has posted an 11.4% increase in full-year sales, in what chief executive Igor Shekhterman has described as a "challenging" market at present.
The group posted sales of RUB 2.2 trillion for the full year (€25 billion), reporting a 5.1% increase in like-for-like sales, as well as a 6.3% contribution from new stores.
The group opened 1,366 net new stores over the course of the year, including 990 proximity stores and 47 supermarkets.
Inflation And Competition
“The macro situation in Russia’s food market remains challenging, with a combination of inflation putting pressure on consumers, strong competition from pure online players and consolidation of offline players," Shekhterman commented.
"At the same time, X5’s strategy of strengthening the existing business while preparing for the future of retail mean we are well positioned to address these challenges while maintaining margins and delivering value to our customers, employees, partners and shareholders."
Sales across the group's digital channels more than doubled during the year, increasing by 140% to RUB 47.9 billion (€550 million).
Store Banner Performance
In its physical outlets, meanwhile, sales were up 11.7% across its Pyaterochka proximity store network, while sales at Perekrestok rose by 10.2%. X5 recently announced the appointment of a new director general for its Pyaterochka business, as well as rolling out the new Jam Perekrestok banner.
It also continued the rollout of its Chizhik hard discounter format, which totalled 72 stores as of December 2021. The group plans to open around 200 stores under the banner in 2022.
Shekhterman said that he believed the retailer's continued focus on efficiency will help drive profitability, citing digitalisation projects that have had a positive impact on full-year EBITDA to the tune of RUB 20 billion.
"At the same time, investments in our media platform Food.ru and the launch of X5 Bank financial services have enabled us to be present across all stages of the customer journey in food, helping us to compete more effectively with a full range of new and existing food market peers," he added.
The group said that trading in January has 'remained strong' to date, with double digit growth across its core Pyaterochka and Perekrestok banners.