Russia's Magnit retail chain posted a like-for-like sales decline across all its divisions, bar its drugstore operation, in the second quarter of its financial year, citing low inflation and increased competition.
According to the group's reviewed half-year results, it saw a total like-for-like decline of 5.2% in the second quarter, with its convenience-store arm seeing a 5.4% decline, its hypermarket division posting a 6.7% decline, and its supermarket business posting a 5.7% drop.
In all cases, both average ticket and traffic saw like-for-like declines.
The group's drugstore operation, however, which boasts 3,093 stores across Russia, saw its average ticket rise by 2.9% and traffic decline by 2.2% in the quarter, to post a slight increase in like-for-like sales, of 0.7%.
In the first half, meanwhile, overall like-for-like sales were down 4.5%, with convenience stores down 4.7%, hypermarkets down 5.8%, supermarkets down 4.5%, and drugstores up 0.4%.
Inflation Impact
Commenting on its like-for-like performance, Magnit noted, 'LFL performance in 1H 2018 was influenced by low food inflation and unfavourable timing of [the] Easter holidays (coming before standard salary payment), [a] lower number of stores opened after redesign (414 vs 830, respectively), as well as intensifying competition and cannibalisation.'
Net sales at the business were 6.5% higher in the second quarter, and 7.2% for the half-year.
Most of the group's divisions posted a net sales increase in the second quarter, with its convenience-store arm seeing a 6.4% rise, its supermarket operation rising by 4.2%, and its drugstore business seeing a 14.4% rise. Its hypermarket business posted a 5.2% decline in the second quarter.
Also during the second quarter, Magnit added a net 335 new stores. The group's total store count as of 30 June was 16,690 stores, incorporating 12,503 convenience stores, 244 hypermarkets, 213 Magnit Family stores and 4,000 drugstores.
In May, the group said that it was looking to expand its reach by potentially opening stores in thousands of post offices.
© 2018 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.
