OREANDA-NEWS. X5 Retail Group N.V., Russia's largest food retailer in terms of sales (LSE ticker: “FIVE”), reported on October 11 a trading update including store opening data and Like-for-Like (“LFL”) sales trends by format and region for Q3 2007.  

According to X5 Retail's press release, in Q3 2007, X5 Retail Group N.V. opened 43 new stores (including 37 soft-discounters and 6 supermarkets) with total net selling space of 24 396 sq. m., of which 6,916 sq. m. in supermarket format and 17,480 sq. m. in discounter format. Meanwhile, 3 non-format discounters with total net selling space of 448 sq. m. in Cheliabinsk were closed under the planned post-acquisition restructuring plan.

As of September 30, 2007, X5 Retail Group N.V. operated 749 company-managed stores (consisting of 573 soft discounters, 163 supermarkets and 13 hypermarkets), with total net selling space of 540,276 sq. m. In the same period, X5’s franchisees’ store network increased by additional 26 stores. As of September 30, 2007, franchisees operated 627 stores across Russia and Kazakhstan in total.

Andrei Rybakov, X5 Retail Group Head of Development commented: “During 9 months of 2007, we have added approximately half the targeted 150,000 sq. m additional net selling space for 2007.  Due to the traditional seasonality of the store opening cycle in Russia, with a historical store opening concentration in Q4, this result is expected and reproduces the store opening pattern of the past few years. For example in 2006, having added 65,000 sq. m. during the first 9 months, we exceeded our full year target of 120,000 sq. m. by 6,000 sq. m. We have concluded contracts for all new store sites scheduled for the opening in 2007. Our target of 150,000 sq. m. for the full 2007 year remains unchanged and we are fully committed to meet it, while moving our focus on securing new sites for the coming year.“

Store Operations
During Q3 2007, X5 Retail Group N.V. even enhanced already strong Like-for-Like sales  performance of Q2 2007. Antonio Melo, X5 Retail Group Chief Operating Officer, commented: “We succeeded in our effort to overcome the traditional summer slow-down pattern, and are pleased to demonstrate even stronger results vs. Q2, especially in our core Moscow market. Our operations in the regions outside Moscow and St. Petersburg, another geographical priority for the Group, also show outstanding improvements, first of all in the key Samara and Nizhniy Novgorod areas. 

Another important achievement was a healthy balance in the contributions of traffic and basket in the overall result across formats and regions. This demonstrates our ability to continuously improve customer appeal and store value proposition in parallel to implementing an efficient and attractive price policy, especially in such highly competitive markets as Moscow and St. Petersburg.”

Lev Khasis, X5 Retail Group CEO, concluded: “Considering our strong store performance, which is supported by successful integration in commercial purchasing and logistics, we confidently look forward to exceed the full year USD 5 billion net sales target.  The Company is entering the most important quarter in terms of sales and new store opening alike, and has all necessary execution plans and resources in place to meet its key 2007 financial and operational objectives.”