7 December 2009

Global retailers, faced with sluggish growth at home, are keen to expand in emerging markets such as Russia, which still offers high growth potential despite the economic downturn. 

Here are some facts about Russia's retail sector: 

 Market overview 

 Turnover: 14 trillion roubles ($480 billion) in 2008, a 27.5 percent rise year-on-year on the back of high oil prices and strong economic growth in an under-served market. Food accounts for 45.3 percent of sales 

 Outlook: In October, sales fell by 8.5 percent year-on-year and VTB Capital sees growth slowing to 4.5 percent this year due to worsenening macroeconomic conditions. 

 Food sales are forecast to rise 12.9 percent after a 28.4 percent increase in 2008, while non-food turnover may fall 2.4 percent against 26.8 percent growth last year 

 Key Russian players 

 X5 RETAIL GROUP 

 Russia's biggest grocer by revenue and part of billionaire Mikhail Fridman's empire Alfa Group. Sales $9 billion in 2008 

 MAGNIT 

 Fast expanding network of hypermarkets and hole-in-the-wall discount groceries. 2008 sales $5 billion 

 DIXY GROUP 

 Discount chain controlled by businessman Igor Kesayev through his Mercury holding company. Sales in 2008 $1.5 billion 

 SEVENTH CONTINENT 

 Upscale Moscow chain, a potential acquisition target by virtue of a 75 percent stake pledged by owner Alexander Zanadvorov with Deutsche Bank. Sales $1.4 billion 

 M.VIDEO 

 White goods retailer. Sales in 2008 $2.7 billion 

 KOPEIKA 

 Discounter. 2008 sales $2 billion 

 LENTA 

 St Petersburg hypermarket chain. 2008 sales $2 billion 

 Main international players 

 WAL-MART 

 With a Moscow office and membership of a Russian retail lobby group, continues to explore investment opportunities in Russia and neighbouring markets. It has been linked to multiple potential deals but none has yet materialised. 

 METRO AG 

 Operates Metro Cash & Carry, Real hypermarkets and Media Markt. Pioneered Russian retail, opening its first Moscow store in 2001, and now has more than 70 stores in Russia 

 AUCHAN [AUCH.UL] 

 Opened its first Moscow store in 2002, has expanded widely in provinces and currently operates more than 30 hypermarkets. 

 CARREFOUR 

 The world's No.2 retailer after Walmart, opened its first Russian store in Moscow in June and second store in the southern city of Krasnodar in September, but failed to strike a deal for distressed Seventh Continent and decided to pull out of Russia after only four months. 

 KESKO OYJ 

 Finnish retailer says it hopes to introduce its food operation to Russia next year and is considering acquisitions in the country, including Carrefour hypermarkets. 

 IKEA 

 Sweden's IKEA, the world's biggest furniture retailer, has opened 12 stores in Russia since 2000, but will not make any new investments in the country until the tangle of red tape that has 

kept its finished store shut for nearly two years is unraveled. 

H&M 

 Swedish fashion giant Hennes & Mauritz (H&M) opened two Moscow stores in March and will open at least one more in Moscow and one in St Petersburg in 2010. 

 STOCKMANN 

 Forced to close its flagship Moscow store after the landlord cut off the electricity supply, but still has aggressive expansion plans in Russia. 

 COLLECTIVE BRANDS INC 

 To open Payless ShoeSource in 2010 with local franchise partner M.H. Alshaya. It plans to open at least 90 stores in about five years. 

 LIMITED BRANDS 

 Limited Brands plans to introduce its Victoria's Secret lingerie chain to the Russian market and is searching for a candidate to head the Russian operations, sources said. 

 HAMLEYS 

 The British toy retailer seeks new partners in Russia after talks failed with local retailer F.D. Lab Group, which wanted Hamleys to lower royalty fees. 

 HARVEY NICHOLS 

 The luxury department store failed to identify a suitable location for a Moscow department store because of high real estate prices. 

 JERONIMO MARTINS 

 Portuguese retailer said last month it was resuming its international expansion and seeking to enter one new market in Central or Eastern Europe in the next three years, with Russia, Ukraine and Romania being named as likely spots. 

Reuters