Each of the company's brands offers a customer value proposition and targets parts of the Russian consumer population. This strategy enables X5 Retail Group to capture a portion of the growth that is forecast for each of the three largest segments of Russia's food retail market.
Pyaterochka is a retail chain of proximity food stores.
Pyaterochka launched a new store refurbishment program in 2019. The new Pyaterochka will offer almost twice as many fresh products in a selling area of around 150 sq m, which is about half of the sales floor. Vegetables, fruits, and some of the perishable items are laid out in the dedicated fresh zone. The rebranded Pyaterochka sells an assortment of ready-to-eat meals and has an area where customers can have coffee or fresh orange juice and charge their devices. An in-house bakery made it possible to expand the amounts of bread and pastry.
In 2019, the Pyaterochka retail chain consisted of 15,354 stores with a turnover of RUB 1.37 trn.
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Perekrestok
Perekrestok is a retail chain of food supermarkets.
In May 2019, Russia's largest smart kitchen was launched for producing semi-prepared foods for stores, allowing a 2.5-fold increase in the ready-to-eat and ready-to-cook range under the Perekrestok Chef brand in the company's supermarkets.
In February 2020, Perekrestok began rolling out a new store concept. Among the highlights of the new concept are updated interior and exterior designs, as well as a selection of new services offered in-store. The new Perekrestok concept includes frequent purchases of ready-to-eat and ready-to-go products. About 50% of the selling space will be dedicated to fresh categories (fruits, vegetables, dairy products,cheese, deli meats, as well as fresh fish and meat) or salad bars, bakeries and cafés. A special area will be focused on the health food category.
Perekrestok is Russia's largest supermarket chain, consisting, at 2019 closing, of 852 supermarkets with a turnover of RUB 273 bn.
Karusel
Karusel is a retail chain of hypermarkets specializing in food.
In 2019, Х5 Retail Group announced its decision to transform the Karusel hypermarket chain within two years:
- 34 stores to become large format supermarkets managed by the Perekrestok retail chain by the beginning of 2021;
- 20 stores to close by 2022;
- 37 hypermarkets to continue operating under the Karusel brand.
At the end of 2019, the Karusel retail chain had 91 hypermarkets with a turnover of RUB 87 bn.
Chizhik
In October 2020, X5 Group launched a new hard discounter "Chizhik" in Moscow and in Balashikha with expectations of its federal expansion. A year after, 27 Chizhik hard discounters were opened in Moscow and in Moscow Oblast with 70 expected, in regions as well, by the end of the year 2021. In 2022, X5 Group announced 3000 Chizhik stores would be opened in 3 years.
Online retail and services
In addition to the retail chains, X5 Retail Group manages the Perekrestok.ru online supermarket and the Dostavka.Pyaterochka and Perekrestok.Bystro food and 5Post parcel delivery services.
Perekrestok.ru
In 2017, the Perekrestok.ru online store was introduced in Moscow and, in October 2018, in St Petersburg.
A dark store combines features of a traditional store and a warehouse: it is not intended for making purchases, but the merchandising display is similar to that of a store. In contrast to a traditional warehouse, a dark store services online orders, and goods are displayed individually.
As of 31 December 2019, the online supermarket had two dark stores in Moscow and one dark store in St Petersburg.
Food delivery services
The Dostavka.Pyaterochka express delivery service was launched in 2019; orders are collected at Pyaterochka stores. For the project, the company developed its own software covering all the project's operational and auxiliary processes. The IT system is integrated into the Х5 Retail Group infrastructure, allowing new stores to be connected to the service in just a few hours and goods balances to be monitored virtually in real-time. There is a patented system in operation for collecting orders at a store, which cuts assembly time considerably and optimizes staff work. As of April 2020, the service was live in Moscow, Skhodnya, Lyubertsy and Kazan.
The Perekrestok.Bystro express delivery service was started up in 2020, with orders being collected at Perekrestok supermarkets. The software is similar to the IT system used by the Dostavka.Pyaterochka service. As of April 2020, the service was operating in Moscow.
5Post
5Post is a subdivision of X5 Retail Group, a developing service for delivering orders from online stores and marketplaces to the company's stores. In the summer of 2018, the subdivision started opening the first lockers and order collection points.
In June 2019, X5 Retail Group and the Unitrade customs broker developed an end-to-end service for foreign online stores. Partners pick up orders from the online store warehouses in China, bring them to Russia, clear them through customs, and deliver them to the X5 distribution centre in Novosibirsk. Then 5Post delivers the parcels to stores.
At the end of 2019, 5Post was managing 12 sorting facilities at Х5 Retail Group distribution centres and 8,000 postamats and order collection points. During 2019, over five million parcels were delivered to clients.
Market position
The company's market share by revenues at the close of 2019 was 11.5%. The closest competitor was Magnit, with a food retail market share of 7.6% (together with non-food and non-retail business – 9.6%).
Operational and financial results
As of 31 December 2019, the company operated 16,297 stores, including 15,354 Pyaterochka proximity stores, 852 Perekrestok supermarkets, and 91 Karusel hypermarkets, the Perekrestok.ru online supermarket (two dark stores in Moscow and one dark store in St Petersburg), and the 5Post delivery service for online store and marketplace orders (8,000 postamats and order collection points).
