Russia's Magnit has seen a turnaround in its like-for-like sales performance, posting a 0.6% increase in comparable sales in the fourth quarter of its financial year, compared to a 2.0% decline the previous quarter.
The group said that this was the first time in two years that the business has posted a like-for-like sales increase, adding that this was driven by improved customer value proposition, changes in category management and increased in-store availability.
The like-for-like gain was largely driven by improvements in its convenience stores (+0.3%) and drogerie (+6.5%) business.
However, its supermarket operations posted a 0.7% decline in like-for-like sales, with a 1.1% increase in average basket size offset by a 1.8% decline in traffic.
Overall, revenue increased by 9.7% in the quarter, to RUB 332 billion (€4.43 billion), while EBITDA was up 4.3% year-on-year on the back of an EBITDA margin of 7.0%.
Business Turnaround
“We are proud to report positive like-for-like sales growth in the fourth quarter for the first time in two years," commented Olga Naumova, Magnit’s chief executive.
"We are delighted that customers have reacted fast to the transformation we started six months ago, helping to grow sales almost 10% in the fourth quarter. With these positive trends and our completed management team we feel very confident about 2019”.]
During full-year 2018, Magnit added a net new 2,049 stores, including 1,302 convenience stores, 731 drogerie outlets and 16 supermarkets; a total of 669,000 square metres of additional space.
The group said that the 'quality of new store openings has improved which supported sales density growth'. The business also redesigned 462 of its outlets in the fourth quarter of the year.
© 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.
