New Hoff format launched at Karusel

​Moscow, 1 July 2019 – X5 Retail Group N.V. ("X5" or the "Company"), a leading Russian food retailer (LSE and MOEX ticker: "FIVE"), and Hoff, one of the country's major household retailers, announce a pilot project to expand the non-food offering at Karusel stores using the shop-in-shop format. Under the agreement, four X5 hypermarkets in Moscow, the Moscow region, and St Petersburg will sublease floor space to pilot Hoff Home selling areas during this summer.

The first new format 900 sq. m Hoff Home shop welcomed its first customers today in a Karusel store on the Novorizhskoye highway. Hoff shopping areas in other pilot hypermarkets will occupy 475–1,000 sq. m., up to 15% of the store's total sales area on average.

Hoff and Karusel analysed customer preferences to shape the optimum mix of household products for such a format, with more than 3,500 SKUs in different styles and reflecting seasonal trends: tableware, textiles, household goods, interior and décor items, and even carpets. The new offering will create additional value for hypermarket customers.

"X5 is continually looking to improve the offering for its hypermarket format. The Company has already updated the concept, branding and CVP, and is constantly seeking to streamline processes. We expect the synergy between two leading players in their respective markets to improve the operational efficiency of the hypermarkets, boost traffic and customer loyalty for both companies," said X5 Retail Group CEO Igor Shekhterman.

"We are convinced that Karusel customers will embrace our non-food expertise, while cooperation with the hypermarket format will increase our brand awareness by giving Hoff a presence in areas with high customer traffic," said Hoff Co-Founder Mikhail Kuchment.

Further rollout will be considered based on the results of the pilot project and an in-depth analysis of the pilot facilities' performance.

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