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Supply Chain

X5 Retail Expands Distribution Network As Online Business Grows

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X5 Retail Expands Distribution Network As Online Business Grows

Russia's X5 Retail Group has announced plans to open two new dark stores in Moscow and St. Petersburg by the end of 2018, as the retailer expands its online grocery operations.

Lebensmittel Zeitung reports that the group is set to invest RUB 70-90 million in each warehouse.

X5's Perekrestok supermarket chain began operating its online store in Moscow in April 2017, and the company expects the e-commerce unit to account for 2% of the banner's total revenue within the next three years.

Strengthening Supplies

Elsewhere, X5 Retail Group said that it strengthened its supply agreements with Russian producers in 2017, working with over 1,000 new suppliers from 63 regions across the country.

The Central federal district showed the strongest activity, with the company establishing nearly 500 new partnerships in the region last year.

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In total, X5's retail chains, which include Pyaterochka proximity stores, Perekrestok supermarkets, Express convenience stores and Karusel hypermarkets, now offer products from more than 5,000 suppliers.

X5 reported sales of RUB 1,286.87 billion in 2017, representing growth of 25.5% year-on-year. The retailer says that this increase was driven by a 5.4% gain in like-for-like sales, as well as a 20.1% growth contribution from new stores.

An extensive expansion plan saw a record 2,934 new stores added to the group's portfolio in 2017, and X5 opened its 12,000th store back in December.

As a result of this expansion, the group also opened a number of new distribution centres last year, with warehouses in Moscow, Orel, Orenburg, Perm, Yekaterinburg and Novosibirsk.

© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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