Grocery retailer Pyatyorochka plans to invest US$50m in the construction of a distribution centre in the Moscow Region, Viktor Belyakov, the company's corporate strategy director, told reporters, according to the Prime Tass news agency. 

Belyakov said that the first stage of the centre is to start operating in 2006 and will have a floor space of 30,000 square meters.

The second stage, which is expected to be launched in 12 to 18 months after the launch of the first stage, will have a floor space of 20,000 square meters, he said. In 2008 the company may build its second warehouse in the region, Belyakov said without elaborating.

Belyakov said that this year the company plans to open the second stage of a warehouse in St. Petersburg with a floor space of 9,000 square meters, investing $9m in the construction.

In 2008 Pyatyorochka plans to have 80% of its merchandise supplies passing through distribution centres, up from 35% as of now, Belyakov said.

He also said that by 2012 the company plans to expand to 30 Russian regions, up from 10 regions as of now, and to increase the number of its stores to 1,000.

As of end 2004 Pyatyorochka operated 235 company-owned stores and had 201 franchise stores. The company's sales amounted to $1.6bn in 2004.

Pyatyorochka has also announced that it has reached an agreement in principle to acquire 18 stores of rival retailer Kopeika in St. Petersburg for U.S. $60.8m.

With the acquisition of these stores, Pyatyorochka will bring the total number of its stores in St. Petersburg to 140 and acquire an additional 7,200 square meters of retail space, the company said.

The acquisition is likely to be completed within the next month.

"Given their similar size and discount format, we believe the Kopeika stores would be a good fit with the Pyaterochka model and intend to integrate quickly the new stores within the existing business," Pyatyorochka CEO Oleg Vysotsky said.