Russian retailer Magnit has posted a 0.6% increase in like-for-like sales in the first quarter of its financial year, however, the group's supermarket division continues to weigh on its performance.
The group saw a 4.2% increase in average ticket in the period, however traffic was down 3.5% across its estate.
Divisional Performance
Its convenience stores division saw a like-for-like average ticket increase of 4.9% in the period, with traffic down 3.6%, giving it an overall like-for-like sales gain of 1.1%.
The supermarkets division, however, saw an average ticket increase of 1.3%, with traffic down 4.5%, giving it a like-for-like sales performance of -3.2%. The group's drugstore division saw a 3.3% increase in like-for-like sales.
Commenting on its performance, Magnit said that it is continuing to adjust its assortment and expand higher price categories, which is reflected in the group's positive ticket gains.
The group said that fourth quarter trends at the business continued for the first two months of the first quarter of this year, 'due to promotional campaigns launched for the November 2018 - February 2019 period'.
'March and April results look encouraging and we are pleased to see improving traffic trends,' the retailer added.
Overall Performance
Total revenue at Magnit increased 10.1% in the period, to RUB 319.0 billion (€4.36 billion).
Net retail sales growth was 8.9%, to RUB 310.6 billion, while wholesale revenue was up 105.8% to RUB 6.6 billion, due to a positive contribution from SIA Group.
The retailer opened a net 875 new stores in the period, including 482 convenience stores and 393 drugstores, compared to 277 stores in the first quarter of last year.
Magnit now boasts a total store count of 19,223 stores as of the end of the first quarter of 2019.
“Magnit sales growth for the first quarter 2019 exceeded 10% on the back of positive LFL sales growth for the second consecutive quarter with an EBITDA margin of 6.0%," commented Olga Naumova, Magnit's chief executive.
"While we are pleased to report positive LFL sales growth the target is to achieve positive traffic dynamics across all formats while maintaining strong ticket growth. This is essential to achieving the ambitious targets we have set ourselves for the transformation of Magnit."
© 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.
