Russian retailer Lenta has posted a 9.6% year-on-year growth in retail sales to RUB 213.4 billion (€2.6 billion) in the first half of its financial year.
This growth was driven by a 12.6% increase in average ticket size to RUB 1,102 (€13.2) across the hypermarket and supermarket formats, offset slightly by a 2.8% decrease in customer traffic, the retailer added.
‘An Unprecedented Period’
Commenting on the company’s performance, Lenta chief executive, Herman Tinga said, “The first half of 2020 has been an unprecedented period for communities and businesses across Russia.
“The COVID-19 pandemic has demonstrated how critical the food supply chain is and we are very proud of the way in which Lenta responded to the crisis and continued to serve communities across the Russian Federation.”
Lenta's wholesale division reported a 19.4% decline in sales to RUB 3.52 billion (42 million) from RUB 4.38 billion (52 million) in 2019.
The company’s EBITDA margin increased to 10.17% in the first half - an improvement of 207 bps or 26% year-on-year.
In like-for-like terms, the retailer saw sales increase by 7.1% in the first six months of its financial year, with a 12.5% increase in average ticket and a 4.8% decline in traffic.
Rud Pedersen, chief financial officer added that despite lower footfall due to the COVID-19 pandemic the company achieved like-for-like sales growth of more than 7%.
“This was driven by a 12.5% increase in average ticket size reflecting Lenta’s best-in-class product range and continued product availability. This sales growth, alongside our continued focus on increasing efficiencies across the business, supported a 26% improvement to our EBITDA Margin,” he explained.
Online Performance
Online sales jumped 324% to RUB 1.9 billion (€23 million), from RUB 441 million in the same period last year.
During this period, Lenta offered online services in 65 cities and continued to expand its express delivery service, Lentochka.
In 2019, the company launched Lentochka with its picking and delivery platform in Moscow.
It has also partnered with more than 20 delivery companies to fulfil online orders from its extensive store network.
In June of this year, Lenta started testing its ‘Click and Collect’ service in two cities, which, if successful, will be rolled out across the country by the end of this year.
Outlook
The retailer is confident of its customer proposition and opportunities for long-term growth amid the macroeconomic uncertainty surrounding the coronavirus pandemic.
Herman Tinga believes that the company is “very well-positioned” and stated, “Our market-leading hypermarket segment continues to offer consumers an excellent product range and a strong value proposition. We are very pleased with the turnaround of our supermarket format over the recent year.
“Furthermore, we are optimistic about our fast-growing online business where we can efficiently leverage our existing infrastructure to serve customers with maximum convenience.”
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: The European Supermarket Magazine.
