Russia's Magnit said that its sales were boosted by its reformatted convenience segment in the first half of its financial year, while its drogerie format also posted 'strong' sales growth.
The group said that total revenue in the first half increased to RUB 657.9 billion (€8.9 billion), a 10.5% increase on the same period last year.
Like-for-like sales were up 1.1% in the period, driven by a 4.1% growth in average basket size, and a 2.9% decline in traffic.
Store Openings
The group ramped up its store openings in the period, with a total net 1,536 new openings in the first half, of which more than half were convenience stores (804). This compares to a total of 612 stores opened in the same period last year, of which 378 were convenience stores.
The openings mean that Magnit is on the cusp of achieving a milestone 20,000 stores, with the total store base standing at 19,884 as of 30 June.
Store redevelopments were also accelerated in the period, with a total of 1,027 convenience stores and 438 drogerie stores undergoing reformatting. Currently, close to two thirds (63%) of convenience stores and two fifths (40%) of drogerie stores are operating under a new format, which is helping to boost sales at the group, it said.
Adjusted EBITDA for the period stood at RUB 45.3 billion, while EBIDTA margin was 6.9%, a decline of 65 basis points year on year due to increased operating expenses, the group said.
In addition, a fire at the group's Voronezh distribution sector also affected the group's profit margin in the period.
New HR Director
Magnit has also announced the appointment of a new HR director, Anna Boborova, who will be responsible for organisational development, employee recruitment, and training and development.
Boborova has more than 20 years' worth of experience in HR, and previously worked at retailers including X5 Retail Group and Metro Group, as well as nuclear energy group Rosatom. She replaces Tatyana Knyazeva in the role.
"Magnit is in the process of the largest business transformation of its 25-year history," commented Jan Dunning, Magnit's president and CEO. "The key success factor here is our people, employees of Magnit, who have already built one of the flagships of Russian retail, and now have to adapt it to modern needs of our customers and the market.
"That is why, I’m especially pleased to welcome Anna on board, knowing that her vast inter-industry experience will allow Magnit’s team to achieve its goals."
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine
