2 March 2017

X5 boosts logistics in Southern Ural Region

Orenburg, 2 March 2017 – X5 Retail Group N.V. ("X5" or the "Company"), a leading Russian food retailer, announces the development of its logistics infrastructure in the Southern Ural Region with the opening of a distribution centre (DC) in Orenburg.

The 19,000 sq m logistics facility will serve the Pyaterochka chain in the Orenburg Region (currently more than 220 stores), and will also supply 120 stores in the Republic of Bashkortostan starting in April. Featuring four separate temperature zones, the facility is designed to store nearly all categories of goods.

The new logistics centre is designed to ensure the availability and freshness of goods even as Pyaterochka continues its active expansion. It will also help to cut transportation costs and unlock new opportunities for local suppliers. The Orenburg DC will be the focal point for local producers, helping them to increase sales and bring their products to new regions. Some have been enjoying the benefits of the DC for several months, as centre has been in operation since November 2016. Today, the DC has reached 100% capacity: it is now ready to handle and accommodate products from over 300 suppliers. The logistics facility increased the number of jobs supported by the Pyaterochka retail chain in the Orenburg Region by 180, with the total now exceeding 2,800 jobs.

The official opening ceremony for the DC was attended by Orenburg region Governor Yuri Berg and Pyaterochka CEO Olga Naumova. X5 Retail Group also invited management from over 50 suppliers to take part in the event. After the ceremony, Orenburg DC hosted the X5 Dialogue Forum, where representatives of X5 Retail Group’s stores shared best practices in partnering with local suppliers and food producers. Local manufacturers received valuable advice on how to build relationships with retail chains, including information on product quality controls and requirements for transportation, storage, sales and disposal of food products set out in the Customs Union’s and X5’s technical regulations.

X5 Retail Group views the development of logistics infrastructure as a strategic priority for the next several years. For the second year running, X5 leads the market by the number of DCs opened throughout the year. In 2015, X5 opened six new DCs with a total area of 142,000 sq m, while the seven new DCs opened in 2016 totalled 212,000 sq m.​