X5 Retail Group, Russia's largest grocer, is set to buy out a franchisee of its Pyaterochka stores.

The company said today (25 March) that it had signed a deal to buy Kama Retail for US$18m. Kama is based in the Perm region east of Moscow and on the western slope of the Ural Mountains.

Under the agreement, X5 will buy 28 soft discount stores with a selling area of 9,300 sq metres.

X5 CEO Lev Khasis said the deal was an "excellent opportunity" to expand in the Urals.

"The Perm region is an important part of X5's regional expansion plan for 2008 and will allow us to expand the group's presence in Urals by adding to its existing discounter chains in Yekaterinburg and Chelyabinsk," Khasis said.

At the turn of the year, the X5 network included 674 soft-discount stores, 179 supermarkets and 15 hypermarkets.

Franchisees ran 688 stores across Russia and Kazakhstan.