​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Outlook and key priorities

The Russian retail market is expanding and consolidating

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​ 2016​2020 (forecast)​
Total size of food retail market, RUB trln13.7​16.6
Share of modern retail format, %6979
Share of top-10 nationwide chains, %2836

Drivers for Macro and consumer pressure

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  • Increase in prices for locally produced products
  • Declining/negative real wage growth
  • Decline of food expenditures as a percentage of the customers budget

Changes in consumer behavior

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  • Active search for attractive promotions
  • Trading down within categories & formats
  • Decreasing consumption/basket volume
  • Splitting purchases between different formats and stores
  • Price hunting increased
  • Big purchases declined

X5 response

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  • Ensure adequate representation / share of value products in assortments
  • Expand local assortment and further increase import substitution

Price strategy

  • Price monitoring of competition and formats’ price perception to maintain market positioning
  • Further increase import substitution with goods less affected by FX fluctuations
  • Selectively control the amount of shelf inflation for certain categories to maintain price perception
  • Selectively invest in the customer to support traffic and price perception

​​​Supplier relations/cooperation

  • Active promotions supported by suppliers
  • Maximizing import substitution and local production, particularly in the entry price category
  • Trade improved payment terms for lower prices


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