AMSTERDAM – X5 Retail Group N.V., a dominant player in the Russian food retail market, has released its 2023 Annual Report, showcasing a year of robust growth and strategic achievements despite market volatility. CEO Igor Shekhterman highlighted the company’s resilience and commitment to excellence, which were evident in the impressive financial results and expansion milestones achieved throughout the year.
In 2023, X5 Retail Group continued to strengthen its market leadership by enhancing its three primary store formats—proximity stores, supermarkets, and hard discounters—and by pursuing organic growth complemented by strategic mergers and acquisitions. The company’s proactive approach to efficiency and productivity, amidst market constraints, has been pivotal in maintaining its competitive edge.
The retail giant’s network expanded to 24,472 stores, with significant developments in its online services, contributing to a 20.8% surge in revenue and a solid 9.6% increase in like-for-like sales, while preserving an EBITDA margin of 6.8%.
The Pyaterochka proximity store format was a key growth driver, opening 2,144 new stores and achieving a 17.3% revenue boost, alongside a 9.8% rise in like-for-like sales. Notably, Pyaterochka’s expansion into the Russian Far East marked X5’s pioneering presence in the region, bringing quality food options closer to local consumers and fostering community development.
The Perekrestok supermarket format underwent a transformation to enhance customer value, resulting in an 8.3% growth in like-for-like sales and an 8.7% revenue increase. Meanwhile, the Chizhik hard discounter format responded to consumer demand by tripling its revenue and expanding its network to 1,500 stores, with a strategic launch in Siberia.
X5’s digital businesses flourished, with net sales rocketing by 75.7% and accounting for 3.9% of consolidated revenue. The company’s focus on streamlining online services and enhancing the mobile app experience has positioned it as a potential leader in the online food retail sector, especially in Moscow and the surrounding region.
The company’s loyalty program, X5 Club, underwent an integration of nearly all business services, offering customers a seamless experience across shopping, meal ordering, and recipe sharing platforms. This unified approach is expected to yield efficiency gains and provide deeper customer insights.
Facing external challenges such as a shortage of operating personnel, X5 implemented initiatives to counteract rising labour costs and improve efficiency, including increased automation and non-contact picking, which led to a 9% boost in labour productivity.
Looking forward, X5 aims to sustain its efficiency drive and expand its regional footprint through targeted M&A deals, having already acquired Tamerlan and Victoria Baltia in 2023. The company’s commitment to community support is also evident in its charitable contributions and environmental initiatives.
Shekhterman expressed gratitude to X5’s employees, partners, and investors for their unwavering support and dedication. With a continued focus on business efficiency, customer service, and social responsibility, X5 Retail Group is poised to reinforce its market leadership in the coming year.
Russian food retailer, X5, acquires Victoria and Deshevo Stores
Leave a Reply