Retail in Russia 2010

The report presents the fourth edition of PMR’s popular examination of the growing and changing retail sector in Russia. This vital document contains the latest news, data, trends reporting and development projections for the following segments:

• grocery
• DIY
• consumer electronics
• fashion
• cosmetics & toiletries

as well as an overview of the entire retail sector, with a focus on sharp analysis of current conditions and market value and activity until 2012.

The worldwide credit crunch has affected the Russian retail industry in varying degrees over the past year. This report clarifies the status of each segment of Russia’s retail market and offers in depth explanation of issues like the rise of discount retailers and the effects of government actions and regulations on the industry and its sales, revenue and profits.

If you need to stay informed on issues such as:

• The overall status of the Russian retail market
• Recent and current trends, as well as forecasts to 2012
• The status of the market in each individual segment
• Food and non food retail market conditions
• Activities of the major chains in each segment of the Russian retail market

...then this is the document you can depend on!

Who should read the report?

• Management and marketing staff from companies active or planning to launch activities on the Russian retail market,
• Firms engaged in consulting, marketing research and analysis
• Embassies, government institutions and sector organizations
• Investment firms, brokerage houses, banks and other financial institutions.

Report strengths

• top 10 largest retailers
• top 10 largest retail chains
• retail sales
• key data on leading chains in segments
• composition of retail market
• composition of grocery market
• share of modern formats
• share of biggest players
• household expenditures

Market commentary by expert

Global economic crisis hampered the development of the Russian retail market in 2009, when the market   growth rate decreased significantly in comparison to rapid pace reported in the previous years.   However,   the 2010 showed signs of improvement on the market, and modern retail formats, especially discount stores and hypermarkets, are using this opportunity to seize higher share at the expense of individual retailers.
On the other hand, problems with liquidity and debts continues and several chains have announced bankruptcy, not being able to deal with worse access to financing and credit repayment.
Nevertheless, the Russian retail market, with its vast size, expanding purchasing power derived for the large population and good potential for growth, remains one of the most attractive retail markets in global terms, with the share of modern retail outlets still low compared to other countries.

Patrycja Nalepa, Senior Retail Analyst

Market information from this report

• Retail sales in 2009 rose in value to RUB 14.6tr (461$bn) from the RUB 13.9tr ($560bn) recorded a year earlier, which is an increase of 5% in comparison to the previous year. We forecast that in 2010 the retail market growth rate will increase to some 9.3% and that the market will be worth RUB 15.9tr ($526bn).
• In 2009 sales of the 10 largest hypermarket chains accounted for $12bn or 5.4% of the total grocery sales in Russia. Auchan still holds the leading position in the segment with a share of 2.4% of total grocery sales in the country.
• Compared to the previous years, 2009 was still characterised by the less active development of DIY networks in Russia. Retailers continued switching the focus from expansion towards increasing the efficiency of existing operations as well as from regional markets towards large and well-developed cities with more affluent populations. 

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1. Methodology p. 7

2. Executive summary p. 11

3. Key macroeconomic indicators p. 21

   • Macroeconomic background p. 21
   • Population p. 24

4. Retail market overview p. 27

   • Market size p. 27
   • Structure of retail sales p. 31
   • Geography of retail p. 33
   • Retail space and shopping centres p. 34
   • Leading retailers p. 35
   • Consumer profile p. 38
   • Internet sales p. 43
   • Market news 2010 p. 46

5. Grocery retail market p. 47

   • Grocery market overview p. 47
   • Overview of individual distribution channels p. 51
   • Hypermarkets p. 51
     • Overview p. 51
     • Profiles of key players p. 53
       • Auchan p. 53
       • O'Key p. 55
       • Karusel p. 57
       • Magnit p. 58
       • Real p. 59
       • Nash Hypermarket p. 60
       • Mosmart p. 61
   • Supermarkets p. 63
     • Overview p. 63
     • Profiles of key players p. 64
       • Perekryostok p. 64
       • Sedmoy Kontinent p. 66
       • Spar p. 67
       • Maria-Ra p. 68
       • Billa p. 69
       • Victoria p. 70
   • Discounters p. 71
     • Overview p. 71
     • Profiles of key players p. 73
       • Pyaterochka p. 73
       • Magnit p. 74
       • Kopeyka p. 75
       • Dixy p. 77
   • Cash and carry p. 78
     • Overview p. 78
     • Profiles of key players p. 79
       • Metro Cash and Carry p. 79
       • Lenta p. 81
       • Cash p. 82
       • Selgros p. 83
   • Small stores, including convenience format p. 83

6. Non-food retail market p. 85

   • Non-food market overview p. 85
   • Consumer electronics market p. 86
     • Overview p. 86
     • Profiles of key players p. 90
       • Eldorado p. 90
       • M.Video p. 92
       • Technosila p. 93
       • Media Markt p. 94
       • Mir p. 95
       • Domo p. 96
   • DIY market p. 96
     • Overview p. 96
     • Profiles of key players p. 103
       • OBI p. 103
       • Leroy Merlin p. 104
       • Maxidom p. 106
       • K-Rauta p. 107
       • Castorama p. 108
       • Starik Hottabych p. 110
   • Clothing, footwear, accessories market p. 111
     • Overview p. 111
     • Profiles of key players p. 117
       • Sportmaster p. 117
       • CentrObuv p. 118
       • Benetton p. 119
       • Sela p. 119
       • Gloria Jeans p. 120
       • Finn Flare p. 122
       • Inditex p. 123
       • Melon Fashion Group p. 124
   • Cosmetics and toiletries market p. 125
     • Overview p. 125
     • Profiles of key players p. 129
       • L’Etoile p. 129
       • Ile de Beaute p. 130
       • Rive Gauche p. 130
       • Yves Rocher p. 131
       • Douglas Rivoli p. 132

7. List of graphs p. 133

8. List of tables p. 137

9. About PMR p. 141

10. Contact PMR p. 142

List of graphs

1. Retail trade turnover in Russia (RUB tr) and y-o-y growth rate (%), 2003-2012
2. Value of grocery retail sales in Russia (RUB tr) and y-o-y growth (%), 2003-2012
3. Composition of grocery market in Russia, shares by value (%), 2009
4. Value of non-food sales in Russia (RUB tr) and y-o-y growth (%), 2005-2012
5. Value of consumer electronics and appliances retail sales in Russia (RUB bn) and y-o-y growth (%), 2005-2012
6. Value of DIY retail sales in Russia (RUB bn) and y-o-y growth (%), 2005-2012
7. CFA retail market value in Russia (RUB bn) and y-o-y growth, 2005-2012
8. Value of cosmetics and toiletries retail sales in Russia (RUB bn) and y-o-y growth (%), 2005-2012
9. GDP growth by quarters in Russia (%, year-on-year), Q1 2008-Q2 2010
10. Growth rates of disposable incomes in Russia (%, y-o-y), 2003-2009
11. Average real disposable income growth in Russia (%, y-o-y), July 2008-June 2010
12. Average nominal salary in Russia (%, y-o-y), 2003-2009
13. Population in Russia (millions), 2003-2012
14. Population (millions) and share of urban population (%) in Russia and by federal districts, 1 Jan 2009
15. Federal districts in Russia by % of total population and territory, as of January 2009
16. Population by age and gender in Russia (‘000), 2009
17. Retail trade turnover in Russia (RUB tr) and y-o-y growth rate (%), 2003-2012
18. Value of non-food and food retail sales in Russia (%, y-o-y), January 2009-August 2010
19. Volume of non-food and food retail sales in Russia (%, y-o-y), January 2009-August 2010
20. Retail sales turnover in Russia by value and volume (%, y-o-y), January 2009-August 2010
21. Share in retail sales turnover in Russia by trade organisation (%), 2008 and 2009
22. Share in retail sales turnover in Russia by trade organisation (%), 2005-2009
23. Number of open-air markets in Russia, January 2005-January 2010
24. Composition of retail sales in Russia by main categories (%), 2000-2009
25. Structure of food retail sales in Russia by category (%), 2009
26. Structure of non-food retail sales in Russia by category (%), 2009
27. Consumer Confidence Index in Russia, Q1 2008-Q2 2010
28. Anwers to question “Is present time favourable/unfavourable for large purchases?”, July 2009-May 2010
29. Answers to question „Where do you usualy buy food and basic FMCG products (%), March and June 2009, June 2010
30. Answers to question „what is more important when shopping”, July 2010
31. Answers to question „Where will you buy food and basic FMCG products (%) during the crisis, June 2009 and June 2010
32. Frequency of online purchases in Russia, 2008 and 2009
33. The most popular purchases online in Russia (%), June 2010
34. Preferred methods of payment for online goods in Russia (%), 2008 and 2009
35. Main advantages of Internet shops over traditional retailing, according to Russian respondents (%), 2008 and 2009
36. Value of grocery retail sales in Russia (RUB tr) and y-o-y growth (%), 2003-2012
37. Composition of grocery market in Russia, shares by value (%), 2006-2009
38. Composition of grocery market in Russia, shares by value (%), 2009
39. Retail sales turnover in Russia by volume (%,y-o-y), Q1 2008-Q2 2010
40. Answers to question “What share of household income is currently spent on food” (%), 1996-2010
41. Number of hypermarkets opened in Russia, 2003-2009
42. Expansion of leading hypermarket operators in Russia, sales ($ m) and storecount, 2005-2009
43. Share of the hypermarket segment as a proportion of Russian grocery retail and the shares of individual retailers in the field (%), 2009
44. Share of the supermarket segment as a proportion of Russian grocery retail and shares of individual retailers in the field (%), 2009
45. Share of the discounter segment as a proportion of Russian grocery retail and shares of individual retailers in the field (%), 2009
46. Share of the cash and carry stores segment as a proportion of Russian grocery retail and shares of individual retailers in the field (%), 2009
47. Value of non-food sales in Russia (RUB tr) and y-o-y growth (%), 2005-2012
48. Value of consumer electronics and appliances retail sales in Russia (RUB bn) and y-o-y growth (%), 2005-2012
49. Retail sales of selected consumer electronics in Russia (RUB bn), 2004-2009
50. Factors decisive for Russians when purchasing consumer electronics (%), May 2010
51. Value of DIY retail sales in Russia (RUB bn) and y-o-y growth (%), 2005-2012
52. Flats completed in Russia (millions of m2 of space and y-o-y index), January 2009-May 2010
53. Housing built (million m2) in Russia by federal districts and y-o-y change (%), January-May 2010
54. Sales of construction materials in Moscow and St. Petersburg (RUB bn), 2007-2009
55. Sales of construction materials in Russia (RUB bn) by federal districts, 2009
56. Planned and realised home renovation (%) in Russia, 2008-2010
57. Unprompted brand recognition of selected DIY retailers in Moscow (%), 2005-2009
58. Distribution channels on the Russian DIY market (%), 2009
59. CFA retail market value in Russia (RUB bn) and y-o-y growth, 2005-2012
60. CFA market in Russia by distribution channel (%), 2009
61. CFA market in Russia by price segment (%, value shares), 2009
62. Answers to question “Which fashion brands did you buy in 2009” (%), August 2008 and 2009
63. Value of cosmetics and toiletries retail sales in Russia (RUB bn) and y-o-y growth (%), 2005-2012

List of tables

1. Average annual exchange rate $/RUB, 2002-2009
2. Selected economic statistics for Russia (%), 2009-2010
3. Top 10 largest retail market players in Russia, by sales revenue ($ m), 2009
4. Top 10 largest individual chains in Russia, by sales revenue ($ m), 2009
5. Leading retail chains in Russia by distribution channel, 2009
6. Selected macroeconomic statistics for Russia, 2003-2012
7. Average nominal salary in Russia by Federal District (RUB ’000), 2006-2009
8. Most populous cities of Russia, 2009
9. Share of federal districts, Moscow and St. Petersburg (%) in the total retail sales turnover in Russia, 2003-2009
10. Retail sales turnover in Russia by federal districts (RUB tr), 2009
11. Population and retail sales of Russia by federal district (% of total population and % of total retail sales), 2009
12. Selected largest retail market players in Russia, by sales revenue ($ m), 2009
13. Selected largest individual chains in Russia, by sales revenue ($ m), 2009
14. Leading chains by retail subgroup in Russia ($ m), 2009
15. The top 10 countries of the 2010 Global Retail Development Index
16. Top 10 most international retail countries, 2010
17. Top 10 most international retail cities, 2010
18. Answers to the question “How would you describe your behaviour when shopping for products and services?” (%), February-May 2010
19. Russian retail market timeline – selected market news, 2010
20. Largest retail chains in the hypermarket arena by sales value in Russia ($ m), 2009
21. Key data on Auchan
22. Auchan storecount in Russia, October 2010
23. Key data on O’Key
24. O’Key storecount in Russia by formats, August 2010
25. Key data on Karusel
26. Karusel key format statistics, as of the end of 2009
27. Key data on Magnit
28. Magnit hypermarket sub-formats, 2010
29. Magnit hypermarkets in Russia, August 2010
30. Key data on Real
31. Real storecount in Russia, August 2010
32. Key data on Nash Hypermarket
33. Nash Hypermarket stores in Russia, August 2010
34. Key data on Mosmart
35. Mosmart storecount in Russia, August 2010
36. Largest retail chains in the supermarket arena by sales value in Russia, 2009
37. Key data on Perekryostok
38. Perekryostok key format statistics as of the end of 2009
39. Key data on Sedmoy Kontinent
40. Sedmoy Kontinent supermarkets in Russia, August 2010
41. Key data on Spar
42. Spar stores in Russia, August 2010
43. Key data on Maria-Ra
44. Key data on Billa
45. Rewe Group storecount in Russia, August 2010
46. Key data on Victoria
47. Victoria Group storecount in Russia, August 2010
48. Largest retail chains in the discount arena by sales value in Russia, 2009
49. Key data on Pyaterochka
50. Pyaterochka key format statistics, as of the end of 2009
51. Key data on Magnit
52. Magnit stores in Russia, H1 2010
53. Key data on Kopeyka
54. Kopeyka: comparison of formats, 2009
55. Key data on Dixy
56. Dixy Group store formats, as of December 2009
57. Largest chains in the cash and carry market by sales value in Russia, 2009
58. Key data on Metro Cash and Carry
59. Metro Cash & Carry storecount in Russia, August 2010
60. Key data on Lenta
61. Lenta storecount in Russia, August 2010
62. Key data on Cash
63. Key data on Selgros
64. Selected chains in the convenience stores market by sales value in Russia, 2009
65. Largest retail chains in the consumer electronics market by sales value in Russia, 2009
66. Key data on Eldorado
67. Key data on M.Video
68. Key data on Technosila
69. Key data on Media Markt
70. Key data on Mir
71. Key data on Domo
72. Classification of selected Russian DIY networks by assortment and geography of operation, 2010
73. Largest retail chains in the DIY market by sales value in Russia, 2009
74. Key data on OBI
75. OBI storecount in Russia, August 2010
76. Key data on Leroy Merlin
77. Leroy Merlin storecount in Russia, August 2010
78. Key data on Maxidom
79. Maxidom storecount in Russia, August 2010
80. Key data on K-Rauta
81. K-Rauta storecount in Russia, August 2010
82. Key data on Castorama
83. Castorama storecount in Russia, August 2010
84. Key data on Starik Hottabych
85. Starik Hottabych storecount in Russia, August 2010
86. Places of clothing purchase in Russia, August 2009
87. Leading retailers involved in CFA trade in Russia, 2009
88. Sportmaster’s profile, 2009
89. Sportmaster retail chains formats, May 2010
90. Franchised retail chains developed by Sportmaster, May 2010
91. Key data on CentrObuv, 2009
92. Key data on Benetton, 2009
93. Key data on Sela, 2009
94. Key data on Gloria Jeans, 2009
95. Key data on Finn Flare, 2009
96. Key data on Inditex, 2009
97. Melon Fashion Group’s profile, May 2010
98. Melon Fashion Group’s brand portfolio, May 2010
99. Largest retail chains in the cosmetics and toiletries market by sales value in Russia, 2009
100. Key data on L’Etoile, 2009
101. Key data on Ile de Beaute, 2009
102. Key data on Rive Gauche, 2009
103. Key data on Yves Rocher
104. Key data on Douglas Rivoli, 2009

Auchan
Benetton
Castorama
CentrObuv
Dixy
Eldorado
Gloria Jeans
Holiday Group
Ikea
Ile de Beaute
Inditex
Karusel
Kopeyka
L'Etoile
Lenta
Leroy Merlin
LVB
M.Video
Magnit
Media Markt
Megamart
Melon Fashion Group
Metro Cash & Carry
OBI
Real
Rewe
Rive Gauche
Sedmoy Kontinent
Sportmaster
Starik Hottabych
Technosila
Tengelmann
Victoria Group
X5 Retail Group
Yves Rocher
Zara

and more...