X5 Retail Group aims to be the leader in product safety and quality and promote healthy lifestyles as a key competitive differentiator. We approach our health and safety commitment from the perspective of consumers, employees, and suppliers:
- Our customer philosophy begins with ensuring product quality and safety, which is essential to maintain consumer trust, reduce risks to our business and support the healthy development of the food supply to Russian consumers.
- We cater to the increased demand of Russian consumers for fresh produce and other products that contribute to an active, healthy lifestyle.
- X5 also engages its suppliers and employees to ensure adherence to health and safety standards within the supply chain and in our operations.
- X5 actively complies with and participates in the development of government rules and regulations to protect consumers’ rights, and policies to promote the quality, health and safety of the food supply for Russian citizens.
X5 continuously reviews and implements standards and best practices that go beyond compliance with laws and regulations. Our approach to quality control is based on the following principles:
- Systematic approach covering every stage of a product life cycle
- Preemptive approach aimed at preventing product recalls and shrinkage
- Strict definition of producers’ responsibility for quality and safety
- External audits of producers by certified quality specialists
- Independent product analysis by certified testing centres
- Documented confirmation of product quality and safety from producers
In 2009 X5 became the first Russian food retailer to join the Chartered Quality Institute (CQI), the London-based association for quality management professionals. Participation in CQI provides X5 with access to the institute’s informational resources on the most recent developments in the field. It will support efforts to improve customer satisfaction, implement best practices, increase efficiency, reduce shrinkage and identify and manage key risks.
CONSUMERS X5 puts its customers first. We realise that the quality and safety of the products we sell in our stores is crucial to our long-term success and reputation in the marketplace. The Company’s policies play a vital role in the development of Russia’s food supply chain.
X5 also aims to promote a healthy lifestyle for all of our customers, regardless of their level of income. “Focus on fresh” is a key differentiator for X5’s formats and we lead the market in sales of fruit and vegetables, dairy products, meats and fresh fish.
Demand for organic products is very low in Russia at this stage, but X5 has begun to prepare for future consumer trends. In July 2008, X5 launched “Green Perekrestok” as a premium supermarket offering a wider range of healthy and organic foods. Food products that conform to Genetically Modified Ingredients (GMI) standards are already labeled as “Excluding GMI” on a voluntary basis in all our stores, and we undertake random inspections to verify compliance.
EMPLOYEES X5’s quality control department is responsible for ensuring compliance with quality, health and safety standards. We continuously verify the quality of products and compliance with health and nutrition standards both in our distribution centres and our stores.
When accepting shipments and deliveries, our quality control specialists ensure that goods meet Russian and international standards, technical requirements, and in-house norms, which are often stricter than those required by regulators. We increase our store and warehouse personnel’s technical knowledge and skills in this area through special education Programmes, information and training.
SUPPLIERS X5 is the partner of choice for almost 4,700 suppliers, and we have taken extra steps in 2009 to ensure a well-functioning supply chain. We continue to work in partnership with suppliers to ensure there is a mutual understanding of the standards we set.
Our contract terms with suppliers stipulate adherence to Russian legislation on quality standards, health and safety, sanitary rules and consumer protection as specified by the Consumer Protection Act and Civil Code. All X5’s suppliers go through a strict selection process, which for non-branded goods and private label is managed through electronic auctions. Selection procedures are transparent, distinguishing X5 from many of its competitors.
The fish industry is an example of X5’s active involvement in the supply chain. X5 was the first Russian retailer to arrange for fish deliveries straight from the docks. We go above and beyond the standards set in the Consumer Protection Act by providing extended verification of fish suppliers – this policy is vital to providing X5’s customers with the highest quality fish. At an industry level, X5 regularly participates in conferences, forums and exhibitions, and we also consult with state bodies, federal agencies and authorities to discuss industry developments, problems and solutions.
As part of X5’s private label strategy, we have defined a clear procedure for choosing suppliers based not only on price, but also on quality. In addition to the legal requirements for private label products, all suppliers must adhere to additional contractual requirements set by X5. This includes provision of additional certificates, conformity of products to our specifications, sanitary rules, labeling and packaging requirements. X5 monitors quality both when a new product is being introduced and throughout its production lifecycle. Production plants are audited regularly and we receive certificates confirming the quality of products and compliance with health and nutrition standards.