Russian retailer O'Key Group announced that its 12 month net retail sales for 2016 showed a 7.6% year-on-year increase, compared to last year.
Sales increased from RUB 160.3 billion to RUB 172.5 billion.
In the fourth quarter alone, net retail sales increased by 4.8%, increasing from RUB 47.2 billion to RUB 49.5 billion, compared to 2015.
The group's discount banner DA! experience the most growth last year. The O'Key Group christened only four new hypermarkets while closing one, and closed five supermarkets, with one new opening in 2016.
However, it opened 19 discounters, and their banner like-for-like net revenue increased by 2%, encouraged by a 0.9% growth in traffic and a 1% increase in average ticket. Retail net revenue of discounter sales went up by 4.5%, reaching RUB 166.8 billion.
Fourth quarter like-for-like revenue for the discount chain increased by 64.1% year on year, with a 36.4% jump in traffic, compared to a group-wide like-for-like revenue decrease of 1%, partially due to a 4.2% decrease in traffic.
The company attributed the DA! brand discounters' success to their mix of products, including branded and private label offers, which are tailored to customers' needs.
The group ended the fourth quarter with 54 discount stores in the Moscow region, and plans to open 20 more in 2017.
Heigo Kera, chief executive of the O’Key Group, said of the results: “In 2016, we put continuous efforts into boosting efficiency of our business in the segment of hypermarkets/supermarkets and further developing our discounters.
"The larger retail formats faced increasing competition against the aggressively expanding convenience stores, while the purchasing power was declining".
He added that they were able to streamline the company's performance by opening distribution centres in Moscow and St. Petersburg, increasing the logistics centralisation to 40%. Kera also lauded the group's strengthening of its loyalty programme via co-branded credit cards, and its focus on developing online sales.
As of January, the O'Key Group had 164 stores across Russia, including 74 hypermarkets and 36 supermarkets, in addition to discounters.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Karen Henderson. Click subscribe to sign up for ESM: The European Supermarket Magazine.
