Russian retailers are cautious about new store openings

By: trademagazin Date: 2009. 01. 02. 00:00

The most chain is thinking in smaller shops againt big hypermarkets.

 Leading Russian retail chains have
become more cautious about opening new stores and many companies have
abandoned high-cost projects. Anna Kareva, Investor Relations Manager
at X5 Retail Group, said: "The return on investment period for
hypermarkets is at least three years, while smaller stores on leased
premises produce a return in just two or three months." X5 will
halve its capital expenditures in 2009, to USD500 million. Kareva
says: "In approving new projects, we shall give preference to
small-format stores, primarily the Pyaterochka discount chain, and we
shall mostly be using leased premises." Magnit and Dixi will
adopt a similar strategy in 2009. Magnit's investment forecast for
2009 has been cut from USD750-800 million to USD660 million. It will
open 10-15 new hypermarkets rather than the 17 planned earlier
although the company is likely to focus on small grocery stores with
the opening of 350-400 stores, rather than the 250 previously
planned. Dixi Vice President Ilya Yakubson says his company is
focusing on stores that yield a return within 18 months. Meanwhile,
Sedmoi Kontinent has said that it is prepared to spend at least
USD140 million on development in 2009 – but only for stores where
construction began in 2008.


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