Russian retailer Magnit has posted a 0.7% decline in like-for-like sales in the third quarter of its financial year, with like-for-like traffic down 3.4% in the period.
Like-for-like average basket sales were 2.8% higher, however, with Jan Dunning, the retailer's president and CEO, saying that the quarter demonstrates "clear signs of improvement in our business".
Total revenue for the period was up 10.5% to RUB 342.6 billion (€4.81 billion), with net retail sales up 9.1% year-on-year, to RUB 333 billion (€4.67 billion).
Wholesale revenue almost doubled in the period (up 97.8%) to RUB 9.6 billion, driven by the distribution of pharmaceutical products.
Divisional Performance
The group's convenience stores division posted a 10.7% increase in total net retail sales, with store numbers increasing by 13.2% compared to the same period last year.
Elsewhere, the group's supermarkets division saw a 5.5% decrease in sales, with the number of stores rising by 2.2%, and its drogerie outlets saw sales rise by 23.4%, with store numbers rising 34.0%.
Magnit has been busy on the store refurbishment front, redesigning 424 convenience stores and 214 drogerie stores in the period. As of 30 September, the sure of refurbished and new stores within the group reached 67% and 48% respectively.
'Positive Sales'
"Our convenience and drogerie formats continue to show positive LFL sales," said Dunning. "LFL traffic, although still negative, is recovering with LFL basket continuing its positive trend.
"In the third quarter we took a strategic decision to sell more than half of our passive matrix stock. It had a one-off negative effect on our EBITDA margin and LFL Sales but allowed us to clear up crucial space for our new assortment, a key component of our CVP."
Dunning noted that during the third quarter period, it achieved 'significant assortment improvements', including launching a category management function and increasing availability.
"These developments have not yet been evident in the LFL numbers, but I am looking to the coming quarters with growing confidence," he said.
The period also saw the group pilot a new store format, Magnit Vecherniy (Magnit Evening), which offers a wide range of liquor and low-alcoholic beverages and private label products.
It also unveiled a new confectionery factory in Industrial Park Krasnodar; the largest in the south of Russia.
© 2019 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.
