Russia's X5 Retail Group has posted a 5.0% increase in like-for-like sales in the second quarter of its financial year, with all its divisions posting growing in the period.
The group's Pyaterochka banner saw like-for-like sales up 4.8%, driven by growth in both traffic (+3.2%) and basket size (+1.6%).
Its Perekrestok banner posted a like-for-like gain of 7.7% (traffic up 6.3% and basket up 1.3%), while Karusel, its hypermarket division, posted a marginal like-for-like increase of 0.4% (traffic down 3.5%, basket up 4.1%).
'Tough Environment'
“In the continuing tough consumer demand environment I am pleased with the progress X5 is making," commented X5 chief executive Igor Shekhterman.
"Our business is competing strongly, growing market share through increasing customer traffic and balanced network expansion, while delivering improving returns to investors and taking important steps to evolve into a digital-driven omnichannel retailer."
Revenue growth at the business was 14.3% in the quarter, to RUB 437.3 billion (€5.92 billion), with Pyaterochka, the group's largest division, posting a revenue gain of 15.6% to RUB 349.4 billion (€4.73 billion) under IAS 17 accounting measures.
Perekstrok, meanwhile, posted a 18.1% revenue increase (despite the closure of the Perekstrok Express business in March), while Karusel was down 3.6%. The business reported a 9.4% year-on-year increase in net retail sales from net new space, resulting from a 14.1% year-on-year rise in selling space.
Adjusted EBITDA at the business was RUB 36.6 billion, an increase of 24.2% under IAS 17. Adjusted EBITDA margin was 8.4%.
Operational Efficiencies
Shekhterman said that the group's positive performance in the second quarter was due to ongoing efforts by the group's management team to improve operational efficiencies, and implement new technologies into its businesses.
This has helped lower shrinkage levels, improve staff productivity and helped the business retain personnel.
“In addition to strong performance at our bricks-and-mortar business, we continue to develop X5’s online and omnichannel offerings," he added, noting that Perekrestok.ru has increased its order level fourfold year-on-year, putting it "on track to become Russia’s leading online food retailer by the end of next year".
© 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.
