Eurotorg, Belarus' biggest retailer, has posted a 14.9% increase in net retail sales in the second quarter of its financial year, to BYN 1,153 billion (€503 million).
Like-for-like sales were down 4.7% in the quarter, the retailer said, with negative like-for-like traffic of 6.5% partly compensated by 1.9% growth in average basket size.
The group said that its like-for-like performance was somewhat affected by cannibalisation due to the 'accelerated expansion' of the group. Q2 LFLs were an improvement on those of Q1, which saw a 8.5% decrease, it added.
“Like-for-like sales remained under pressure as a consequence of the rapid pace of our expansion programme, although in the second quarter we saw an improvement quarter-on-quarter in like-for-like traffic," commented Andrei Zubkou, Eurotorg chief executive. "We believe that the current trend will continue in the second half of the year.”
Geographical Reach
The quarter saw Eurotorg expand its regional presence, opening in 13 new localities across Belarus. It added a net 63 new stores in the quarter, giving it a total of 993 stores as of 30 June 2019.
Its 142 drogerie stores, operating under the Magia brand, posted retail sales of BYN 14.7 million (€6.42 million) in the period, while its two online grocery services, E-dostavka.by and Gipermall.by) generated revenue of BYN 50.3 million.
Discount Banner
During the period, Eurotorg launched a new discount retail banner, Hit!, to continue to diversify its customer proposition.
As of 30 June, the retailer operated 151 stores under the Hit! banner, across 68 localities in Belarus, with some stores previously operating under the Euroopt banner converted to Hit! stores, as well as several new builds.
Focus On Expansion
“Eurotorg continued its focus on expansion with net retail sales growth of 14.9% in 2Q 2019. Net retail sales continued to increase at double-digit rates, driven by expansion of the grocery retail chain and the further development of Eurotorg’s e-commerce and drogerie businesses," said Zubkou.
“During the period we continued to pursue our capex-light expansion strategy and maintained our focus on further geographical expansion. In the first half we added 131 net new stores of all formats and entered 34 new localities. As of the end of the period our total number of stores reached almost a thousand, covering 331 localities – in more than 200 of these the company is the only modern format grocery retailer."
The group said that it is maintaining its capex-light strategy, with 45 of the 50 net new added stores opened in leased premises, as well as the 13 Magia drogerie stores.
It is also focusing on smaller grocery formats, with almost all new grocery stores added adopting a convenience format.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
