Russia’s O’Key Group Sees Revenues Decline In Q4
Russian retailer O’Key Group has said that its group net retail revenue declined 1.2% in the fourth quarter of its financial year, to RUB 48.9 billion (around €700 million).
The group said that this decline in revenue was largely influenced by both growing competition in the Russian retail market, as well as the commencement of the sale process of its supermarket business.
In December, rival X5 Retail Group said that it was acquiring the supermarket business of O’Key, which consists of 32 supermarkets, including 18 in St. Petersburg.
During the quarter, the group opened one new city hypermarket, in Ekaterinburg, as well as eight new DA! discounters in the Moscow area.
Full Year Performance
While Q4 was down marginally, O’Key’s full year net revenue was up 1.1% to RUB 172.5 billion (€2.47 billion).
However its like-for-like group net retail revenue was down 1.4% for the full year, due to a 2.2% decrease in like-for-like traffic, and a 0.8% increase in the value of the average ticket.
“On the operational front, in Q4'17 and throughout 2017 we remained focused on enhancing our customer value proposition through the introduction of a competitive pricing policy, the implementation of effective marketing initiatives and assortment structure improvement,” commented Miodrag Borojevic, chief executive of the group’s O’Key hypemarket and supermarket business.
At the same time, he noted that the group has sought improve logistics centralisation at the group, noting that this has resulted in a “mproved overall centralisation rate of almost 60% at the end of 2017, up from 40% at the end of 2016."
Armin Burger, chief executive of the group’s DA! discounter operation, added that during the year, the banner "put significant effort into diversifying and enhancing our value proposition to customers by improving the assortment mix and overall customer experience. The value of these efforts can be seen in our LFL numbers staying strong YoY.”
As of the end of Q4, O’Key operated a total of 145 stores, 11.6% lower than at the same period last year.
© 2018 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.