Russia's major retail chain boosting sales of Russian-caught wild salmon to defy logistic bottlenecks

October 5, 2009 16:46
Russia's major retail chain Perekrestok operated by X5 Retail Group N.V is boosting sales of wild salmon from the bumper crop in the Russian Far East. To overcome the lack of adequate-size distributors with modern logistics the chain has sent mobile purchase groups to Nakhodka and Vladivostok, reports  with reference to a dedicated report on national TV channel 2.

As regards other species, such groups have also been dispatched to Astrakhan and Murmansk. As a result of the move, the sales of Russian-caught fish (presumably in Moscow based stores) have been quickly accelerating from 450 metric tons in August to 650 tonnes of chilled and frozen product  in September  while a further rise to 1000 tonnes and more is expected shortly. 

In fact, in a space of three weeks shipment of 600 tonnes of pink salmon has been carried out with the fish selling like hot cakes in the supermarkets at a very attractive price of RUR 69.9 per kilo as the direct logistics has assured good quality and a low cost input.

The figures have been disclosed during an early October televised debate by the chain's marketing director Mikhail Susov. 

Among other novelties he has mentioned new price policy as regards glazing content in the product. According to Mr. Susov, they will now  defrost samples of each incoming lot in order to deduct the water weight from the cost in the purchase price and in the shelf price thus solving the controversial issue of too much glazing in the imported fillets .

However, Mr. Susov  has complained  that the chain has had to go direct to the fishing regions because in Russia there are no adequate-size distributors to supply big super and hypermarket operators with seafood of the necessary quality and volumes.

Such a distributor is reportedly  being set-up by government-owned and private interests  but  the chain has decided not to wait for the proper filling of the logistic gap on the market with the record salmon catch at stake.


According to the website of X5 Retail Group N.V., the concern is the largest retail company in Russia in terms of sales.

As at 30 June 2009, X5 had 1,164 Company-managed stores located in Moscow, St. Petersburg and other regions of European Russia, Urals and Ukraine, including 900 soft discount stores, 211 supermarkets and 53 hypermarkets.

As at 30 June 2009, X5's franchisees operated 605 stores across Russia.

Pyaterochka and Perekrestok have merged their operations as of 18 May 2006 to create the clear leader in the Russian food retail market.  In June 2008, X5 acquired Karusel hypermarket chain and substantially strengthened its position in hypermarket format.

Pyaterochka soft discounters are conveniently located, open seven days a week from 9 am until 11 pm, and offer 4,500 SKUs. The average trading area is approximately 600 square meters.

Perekrestok operates three formats: convenience stores (with an average trading area of 400 to 600 square meters and 7,500 SKUs), supermarkets (800 to 1,600 square meters with 20,000 SKUs) and city hypermarkets (4,000 to 7,000 square meters with 35,000 SKUs). Most Perekrestok stores work 24 hours a day.

Pyaterochka and Perekrestok merged their operations on May 18, 2006 to create the leading multi-format food retailer operating in the Russian market.

X5 Retail Group N.V.'s global depository receipts have been traded on the London Stock Exchange since May 2005 under the ticker "FIVE". Pyaterochka's 2005 net sales (pre-merger) reached US$1.359 million, with gross banner sales in 2005 of over US$2 billion.  Perekrestok net sales over the same period were US$1.015 million. 

For the full year 2008, X5's net retail sales including acquired Karusel stores on pro-forma basis totaled USD 8,892 mln.  For the first half 2009, net retail sales totaled USD 3,959 mln.
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