RUSSIA: Spar looking to add to store network

Spar International, the Netherlands-based retailer, is on the look-out for more franchise partners to add to its network in Russia, the company's managing director has told just-food.

Speaking in an exclusive interview at Spar International's head office in Amsterdam, Dr Gordon Campbell said the company wants to build its business in Russia, where it works with five local retail partners and has 182 stores.

"In Russia, the businesses have had good sales per square metre, a medium level of costs and have been profitable," Dr Campbell told just-food. "The one common feature is that all the partners are operating stores of an exceptional standard and the stores are profitable. That profit has enabled them to develop rapidly and will continue to enable them to develop."

However, a tightenening of credit has led to a number of Russia's grocers - even the larger players like X5 Retail Group and Dixy - to look to secure financial support from state-controlled banks.

Dr Campbell acknowledged that the current conditions in Russia's financial sector may hinder the ability of Spar's partners to buy whole chains, although single-store expansion remains on the cards.

"If an opportunity comes up for any one of them to acquire a small chain, then it's much more difficult to get the immediate backing and to get the level of interest that enables the investment to make sense," he said. "But in terms of their organic growth, or their growth of new stores on a one-by-one basis, then the opportunities are tremendous."

Nonetheless, Dr Campbell admitted that the pace of Spar's expansion in Russia would not be as fast as the company planned due to the turbulent conditions in the financial sector.

Spar is looking to improve its logistics in Russia and two of the retailer's partners in the country are building meat processing plants to sell fresh meat products in store.

Further coverage of just-food's interview with Spar International MD Dr Gordon Campbell will be published next week.