The fastest-growing Russian retailers are those expanding into hard discount stores as real incomes decline and food prices increase, the Financial Times reports, and they are looking to take the concept abroad.
Why it matters
Hard-pressed both financially and temporally, Russian consumers see hard discounters providing a solution to their problems: these stores carry a smaller range of the most in-demand products at a good price and as they are close to residential areas consumers have to spend less time shopping. And one of the leaders in this market is bringing the approach to the UK where it aims to open as many as 300 stores over the next decade, challenging the position of Aldi and Lidl in the market, according to The Grocer.
Siberia-based Svetofor saw revenue grow 39% last year to Rbs189bn ($2.5bn), while Fix Price, which recently opened its 4,500th store in Russia, grew 33% to Rbs190.1bn.
Svetofor’s MERE brand operates in several Western European markets, including Austria, Germany, Spain, Italy and, most recently, the UK.
Other Russian retailers are following the trend as they look to rebalance their portfolio – X5 with its Chizhik brand and Magnit with Moya Tsena; leading hypermarket Lenta is also experimenting with the format.
“The worse the macroeconomic situation gets or the more people whose incomes fall, the better things are for us,” Sergei Lomakin, co-founder, Fix Price.