X5 sees market share decline
Russia?s X5 Retail Group has consistently remained the largest player on the retail market in Russia. However, viagra X5 Retail Group was the only retailer among PMR?s top 20 companies in the country whose market share decreased slightly last year. In 2012, it had 3% of the market, compared to 3.1% noted in the preceding year, according to PMR?s latest report, ?Retail in Russia 2013. Market analysis and development forecasts for 2013-2015?.
The retail market in Russia (excluding sales of motor vehicles and fuels) has undergone changes in the pace of development following the financial crisis. Although the retail industry has demonstrated continuous growth, there was a sharp drop in the growth rate, from 28.3% in 2008 to 8% the next year. In 2010 and 2011, the market had double-digit growth.
In 2012, the Russian retail industry was worth RUB 16.2tr (?406bn or $521bn). The rather moderate year-on-year growth compared to past years of about 12% was a result of the noticeable slowdown of the Russian (and global) economy, especially in Q4 when GDP in Russia reached 2.3%.
It is expected that starting from 2012 the Russian market is likely to have rather moderate growth (about 11% annually in 2013-2015).
The leading company in terms of revenue in Russia is the X5 Retail Group, which develops grocery stores under the Pyaterochka, Perekrestok, Karusel and Kopeyka banners. In 2012, it held 3% of the retail market. The second-ranked retailer, Tander, is at the same time the largest retail chain in Russia in terms of store count (6,884 stores at the end of 2012). The Auchan Group was the third-ranked retailer in 2012, accounting for a 1.4% market share.
The top 20 largest groups active in retail accounted for more than 15% of the Russian retail market and in total had some 15,000 stores in 2012. Their share increased by 1.2 p.p. in comparison to the year before, which is a sign of retail market consolidation in the country. The five top players alone controlled more than 9% of the retail trade in Russia.
Almost all retailers managed to increase their market shares in 2012. The only retailer whose market share decreased slightly in 2012 (from 3.1% in 2011 to 3% in 2012) was the X5 Retail Group, due to its relatively weak financial results in 2012. Last year, the group?s revenues increased by ?only? 8.1%, while in previous years, X5 reported yearly revenue growth of around 30%.
One of the year?s major events, and one likely to influence the competitive landscape of retailing in Russia for the foreseeable future, was the acquisition of Real hypermarkets from the Metro Group by the Auchan Group. In November 2012, Auchan Group signed an agreement with Metro Group concerning the divestment of Real?s business in Central and Eastern Europe. In May 2013, Auchan Group completed the acquisition of Real hypermarkets from Metro Group. According to the agreement, Auchan became the owner of Real hypermarkets in the Central and Eastern Europe market, including 16 existing Real stores, one hypermarket under construction and seven shopping malls in Russia. It is planned that all Real stores in Russia will be rebranded as Auchan during 2013.
It must be noted that Auchan Group and Metro Group enjoy the third and fourth positions, respectively, in the ranking of the leading retail companies in Russia. By revenues of the companies? operations in the country, Auchan Group and Metro Group lag far behind X5 Retail Group and Tander. Meanwhile, the difference between the Auchan Group?s and Metro Group?s revenues is not very significant in Russia. The acquisition of Real is likely to generate a synergy effect for Auchan Group, as Real stores operate in regions where Auchan Group owns distribution centres or runs its own stores. Thus, it will be easier for Auchan to operate and supply the newly acquired assets. Thus, the deal gives the Auchan Group the opportunity to break away from Metro Group, its nearest competitor.
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