X5's Pyaterochka A Standout Performer As Russian Retailer Unveils Q3 Results
Russian retailer X5 Retail Group said that its Pyaterochka banner was the standout performer in its third quarter, seeing like-for-like sales growth of 8.5% and a net retail sales gain of 18.4% in the period.
Like-for-like sales growth at X5's Perekrestok banner was more subdued, increasing by 1.4%, however the banner saw a net retail sales gain of 18.7%.
At a group level, like-for-like sales were up 6.9% for the quarter, driven by a 8.8% increase in basket size, and offset by a 1.8% drop in traffic. Net retail sales increased by 15.4% year-on-year in local currency, the group's best quarterly performance since early 2017.
'The proximity segment was the main contributor to business growth in Q3 2020,' the group said in a statement. 'X5 continues to benefit from its strategic focus on this segment, with traffic inflow from traditional retail and hypermarkets.'
Online was a core driver of X5's performance in the period, seeing revenue of RUB 4.0 billion in the third quarter.
The group saw a surge in its express delivery services from both Pyaterochka and Perekrestok stores, while its online supermarket, Perekrestok Vprok, saw revenue more than triple (+207.6% in the quarter).
Commenting on its performance, analyst Artur Galimov of Sova Capital said that the business posted sales growth ahead of forecasts, which could mean an upside to full-year expectations.
"LFL sales continue to reflect the changes in consumer behaviour, with increased spending per visit offsetting the reduced frequency of visits," he said. "Furthermore, X5 noted trading up across all formats.
"We believe that the acceleration in food inflation also supported baskets. As a result, the growth in LfL sales reached a three-and-a-half year high of 6.9% YoY, as the 8.8% YoY growth in baskets more than offset the 1.8% YoY decline in traffic. Importantly, Pyaterochka managed to almost entirely stop the decline in LfL traffic in 3Q20 (-0.4% YoY), while Perekrestok saw LfL traffic fall 10.8% YoY."
© 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.