5 February 2019

Northernmost Voentorg-Pyaterochka opens in the Murmansk Region

Moscow, 5February 2019 – X5 Retail Group N.V. ("X5" or the "Company"), a leading Russian food retailer (LSE and MOEX ticker: FIVE), announces the opening of the northernmost Voentorg-Pyaterochka store in the Pechengsky District of the Murmansk region. Located in the town of Pechenga, the new outlet has become the most northern outpost of the Pyaterochka retail chain.

With a sales floor exceeding 300 sq m, the store’s design, layout, information systems, and assortment are in line with Pyaterochka’s new concept. Food goods account for 75% of the store’s 3,500 SKUs, with a special focus on the fresh category. The remainder of the assortment consists of non-food items, mostly Russian Army-branded goods and various military supplies.

Supervised by a Freshness Director, the new Voentorg-Pyaterochka is staffed exclusively with Voentorg employees who have been trained at Pyaterochka’s training centre and completed internships at the format’s stores. The opening has created 15 new jobs.

Voentorg and Pyaterochka kicked off their joint project back in 2014, following an instruction from Russia’s Defence Minister, Army General Sergei Shoigu, to ensure the availability of food at prices below the regional average and a more diverse offering to the military to improve their social security and service.

The new store became the 51st Voentorg-Pyaterochka. The co-branded stores are located in Moscow, the Moscow, Leningrad, Kaluga, Arkhangelsk, Murmansk, Orenburg, Kursk and Volgograd regions, the Republic of Tatarstan, the Altai and Krasnodar territories, Khakassia, and other regions.

The partnership between Voentorg and the federal retail chain Pyaterochka is a unique example of mutually beneficial business relations between two large Russian companies where one of them, Voentorg, leverages the infrastructure and business model of the other, Pyaterochka, at its own premises. Operated by Voentorg, the project uses a reverse franchising scheme.​