Discount food hits Moscow
discount, food hypermarket format that promises new opportunities
in private label as Russia's retailers look to increase their
control of the country's food market, writes Angela
Drujinina.
Nash Hypermarket is the first discount project of its type in Moscow. The store will sell nore than 40000 food and other products, including goods under its own private label 'brand', Nash. There will be 50 private label product ranges in 13 categories, and Nash will also be on offer in two of Sedimov's other stores: Universam and Magazin u doma.
The new hypermarket has a total surface area of about 9,000sqm and sales surface is 5 200sqm.
"Our strategy is to not only open stores of a traditional type, but also to present a new type - the hypermarket. We plan to enlarge the network of Nash Hypermarket not only on the Moscow market, but also in the regions. We are in negotiations with the representatives of Russian cities containing more than a million people. After that, according to the results of these negotiations, we will keep you posted about new openings,"- said Galina Ilyashenko, Sedimoy's General Director.
Russia's city authorities and regional officials are keen to re-create the "civilised" retail environment of Western Europe, where supermarkets, hypermarkets, discounters and other types of modern stores control 90 per cent of the whole retail sales. In Russia, such stores only control a fifth of food retail, rising to about a half in Moscow.
Russia's retail turnover rose 12 per cent in 2004 to RUR5565bn (about $202bn), according to the Russian Statistics Department. Around 45.6 per cent of the market is food.
ACNielsen said last September that 'modern' stores (mainly supermarkets and discounters) had more than 21 per cent of the food retail market in the biggest cities of Russia. And, analysts from United Financial Group forecast that by 2010, their stake will increase to 34 per cent (52 per cent in Moscow).
The biggest Russian food retailers are: Pyaterocika (turnover in 2004 - $1,59bn, 445 stores, out of which 235 are their own), Magnit ($997m, 1019 stores) and Perekrestok ($766m, 75 stores).
Sedimoy Continent is the leading supermarket chain in Moscow, with 89 stores. They are divided into four types: Peati Zvezd (21 stores), Universam (31 stores), Magazin u doma (36 stores) and Nash Hypermarket (1 store).
One of Sedimoy's strengths is that its brands are well-recognised by consumers. The firm earnt $495,8m in 2004.
