RUSSIA: O'Key to reinvest in price proposition
O'Key looks to expand into new cities
O'Key Group has said it will look to reinvest margin improvements driven by improved purchasing terms into the development of its private label offer and strengthening of its price proposition.
O'Key yesterday (15 July) revealed a 21.5% increase in sales in the six months to the end of June, to RUR33.19bn (US$1bn). Like-for-like sales were up 7.5% in the period.
The retailer said it opened two new stores in the period, bringing the total to 85. It increased its selling space by 19.3%.
A spokesperson for the group told just-food that the increase in the number of stores will allow it to reduce purchasing prices.
He added: "We plan to increase [our] share of non-food and continue enhancing our private label offering, focus on cost control and operating efficiency, and reinvest margin improvements into price proposition."
The spokesperson said its focus is on opening more hypermarkets in Russia due to a "significant under-supply" of the concept in the country.
"We have plans to enter the new cities, for example in 2013-2015: Orenburg, Chelyabinsk, Bryansk, and Petrozavodsk. We plan to establish a presence in more than 25 Russian cities by 2015 and strengthen our presence in existing cities. For the moment we have 28 hypermarkets and 22 supermarkets under development."
The retailer plans to open both O'Key hypermarkets and O'Key-Express supermarkets across Russia, in addition to the development of a new format in the Moscow region, which it did not reveal details of.
The spokesperson reconfirmed its commitment to a doubling of revenue by 2016.
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