Russian retailer Dixy is focusing its growth strategy on expanding its convenience store network in the country.
The company today (25 July) booked an 89.5% jump in first-half sales thanks to the inclusion of sales from the Victoria chain that it acquired last year. On a pro-forma basis, including Victoria’s results from the start of 2011, sales increased 20.7%, the company said.
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Pro-forma sales gains were driven by store openings, with more than 250 new outlets opened last year. This year the group is planning to open up to 400 stores, a spokesperson for the Russian grocer told just-food.
In recent years, Dixy has refocused its operations targeting growth from convenience stores, the spokesperson revealed. These outlets are located in local residential areas and are around 250 square metres in size and carry approximately 3,500 SKUs.
The firm, which operates in central and north western Russia as well as the Urals, is developing smaller stores in big cities – such as St Petersburg and Moscow – as well as towns with as few inhabitants as 5,000 people, the spokesperson revealed.
The spokesperson said: “During the last two years we dramatically changed our DNA of the brand, of the company. Previously we were a discounter. Now we are a neighbourhood store with a much higher level of service.”
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By GlobalDataThe spokesperson said the neighbourhood concept was “not so well developed” in Russia. However, competition is increasing as retailers such as Magnit and X5 Retail Group have begun develop similar concepts.
As a result, Dixy must compete on service, location and price, the spokesperson added.
“We are focusing ourselves on service. But at the same time pricing is really important in terms of competition. We are giving the lowest price in the neighbourhood…. But of course we can not compete in terms of pricing with hypermarket and cash and carries.”
Dixy operates more than 1,000 neighbourhood stores and is planning to drive growth with further store openings through the remainder of the year.
