1.2.3

Geography of operations

Leading the national expansion of modern food retail

Russia has a population of over 146 million people spread out across 11 time zones. Operating an effective federal network of proximity stores, supermarkets and hypermarkets requires robust backbone infrastructure and systems in order to ensure reliable and high-quality service at every store we operate every day.

Evolving to meet local needs

Russia is an ethnically and economically diverse country, and we are developing our business model to address the needs of local customers depending on regional preferences and local demand. To better address this diversity, we are piloting clusters of stores that adapt their assortment to meet their customers’ needs. We source products from local producers wherever possible, and we engage local suppliers with training programmes to help them reach our customers more effectively. In 2018, the share of local goods across all X5 stores reached 19%.

Smart expansion

We are evolving our approach to expansion in line with the changing food retail market landscape in Russia. After explosive expansion in a low-penetration environment, we will increasingly focus on quality growth. With a well-balanced growth policy, we aim to open fewer stores in order to focus on selecting better locations, which implies higher efficiency without hurting our return on invested capital.