German Retail Giant Prepares New Russia Chain

21/06/2015
German retail company Tengelmann Group is preparing an expansion into Russia's grocery retail sector as political tensions and an economic downturn have strained business ties.

German retail giant Tengelmann Group will open a new network of discounter supermarkets under the "Plus" brand in six Russian regions, a representative of the company told newspaper Vedomosti.
Tensions between Russia and European Union countries over the crisis in Ukraine have strained business ties. Russia's economic downturn amid declining oil prices has also increased demand for discounter supermarkets in the still-underserved market. Russia's biggest retail chain, Magnit, currently opens up to 2,000 new stores per year, or roughly six per day. The chain, Russia's biggest private employer, also saw it revenue grow by nearly 32 percent in the past year.
President of the Federation of German Industries (BDI), Ulrich Grillo delivers a speech at this year's first BDI press conference
While Russia has around ten foreign grocery chains, only around 60.5 percent of retail trade is done through supermarkets, according to the newspaper. For comparison, 88 percent of German retail trade was done through supermarkets in 2013.
Tengelmann group already operates a network of OBI hardware stores in Russia. For the new stores, the company plans to buy lots and build new stores and rent spaces in newly-built shopping centers rather than rely on existing infrastructure.
The group plans to open 150 discounter stores in Russia by 2022. Unlike regular supermarkets, the discounters opened by Tengelmann will have only around 2,200 types of items in its stores, roughly the equivalent of small corner stores, but sold at large volumes. The stores will primarily stock domestically made items rather than imported goods.

Fonte:http://sputniknews.com/business/20150618/1023535767.html

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