Moscow, 12 April 2017 – X5 Retail Group, a leading Russian food retailer, announces the signing of a cooperation agreement with the Central Union of Consumer Societies of the Russian Federation (Centrosoyuz). This partnership will encourage the development of retail trade in Russia’s regions, supporting both X5’s social mission of cooperation with the consumer and the Centrosoyuz mission to secure the supply of affordably priced staples and other high-quality products to remote rural areas. This five-year agreement has the potential to lead to the opening of up to 1,000 new stores under the joint brand of COOP-Pyaterochka during the first three years of the project.
COOP-Pyaterochka stores would be opened at Centrosouyz’s existing consumer cooperatives, and would improve the food supply infrastructure thanks to renovations and upgrades to Centrosoyuz stores, introduction of advanced retail standards, and use of Pyaterochka’s logistics solutions.
The project will be implemented mostly through franchising. With access to X5’s extensive supplier base and logistics capabilities, Centrosoyuz will benefit from reliable supplies of a wide assortment of goods and improved affordability. The consumer cooperative will coordinate local with consumer societies and Pyaterochka to select retail facilities, optimise document management, and organise repairs and upgrades in order to develop modern retail formats.
Centrosoyuz’s educational infrastructure will be made available for personnel trainings for joint stores and for Pyaterochka’s own operations, while students of the Russian University of Cooperatives will be offered internships at Pyaterochka stores.
The parties have also agreed to open up to 5,000 Pyaterocka-based shop-in-shops by 2021 that will sell goods from local farmers and consumer cooperatives. The primary focus of this subleasing partnership is to create a comprehensive product and service offering tailored to the needs of the local customer.
The agreement also enables Pyaterochka to supply products from its own assortment to consumer cooperatives that are not part of the project, thereby improving the availability of food and non-food products to rural residents. With the goal of optimising logistics costs and reducing shrinkage, deliveries may take place directly to the stores or to the partners’ distribution centres in the regions where Pyaterochka operates.