Russian retail chain Lenta has recorded a 0.9% sales increase on a like-for-like basis for 2017, posting a 5.2% increase in sales during the fourth quarter.
Total sales for the year grew by 19.2% to RUB 365.2 billion.
This growth was fuelled in large part due to the retailer’s large-scale store expansion during Q4, which resulted in a 23.4% total sales growth year-on-year during that period, to RUB 112.2 billion.
Store Expansion
The retailer opened a total of 89 new stores during the year, including 40 new hypermarkets and 49 new supermarkets, adding 236 million square metres of net selling space, and bringing its total network to 231 hypermarkets and 97 supermarkets.
The retailer added 30 new hypermarkets and 33 new supermarkets to its network during Q4, increasing its selling space to 1,382,111 square metres, up 20.6% from its store count as of Q4 2016.
During the fourth quarter, the retailer also expanded its network eastwards to Siberia and the Ural region. In November the company signed an agreement with the Holiday Group to acquire 22 supermarkets in the Siberia region, of which six were opened in December.
“We doubled our supermarket network during 2017, opening more stores than in the previous four years since this format was launched in 2013,” said Jan Dunning, CEO of Lenta.
“We also made notable progress in Moscow with 11 new hypermarkets and 10 new supermarkets, leading to year-on-year increases of over 70% in fourth quarter sales and selling space in this region.”
Customer Loyalty
In the fourth quarter of 2017, Lenta recorded a 17% increase in loyalty cardholders to 12.3 million, with approximately 95% of transactions made using the loyalty card.
Store traffic grew by 1.4% on a LFL basis, with a 2.3% ticket size increase for the year. For the final quarter, store traffic was below par compared to the entire year, with an increase of 0.6%. However, the last three months of the year saw a larger average ticket size increase of 4.6%.
“Customers reacted positively to continuing improvements in our offering, range, marketing and communication and this led to substantial improvements in both like-for-like ticket and traffic growth,” Dunning said. “We were particularly pleased to achieve an increase in like-for-like traffic for the first time in the year. Although we continued to see some pressure from cannibalisation and deflation in the quarter, these effects show some signs of abating."
“For 2018, the Lenta team will continue its efforts to drive sales by further strengthening our customer proposition. We also expect some improvement in the macroeconomic and consumer environment.”
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Kevin Duggan. Click subscribe to sign up to ESM: The European Supermarket Magazine.
