12 September 2023

X5 expands cooperation with Far Eastern regions

Vladivostok, 12 September 2023 – X5 Group (“X5” or the “Company”, LSE and MOEX ticker: FIVE), a leading Russian food retailer, has signed cooperation agreements with four regions in the Far Eastern Federal District. At the Eastern Economic Forum the Company entered into partnerships with the Primorye and Kamchatka Territories, the Sakhalin Region, and the Jewish Autonomous Region. X5 also announced expansion plans for the Far East, including the first store openings in the Amur Region and the Jewish Autonomous Region in 2024.

The agreements with the Sakhalin Region, Jewish Autonomous Region and Primorye Territory envisage joint efforts to bring more local producers and SMEs to the consumer market, the facilitation of investment projects in retail, and the development of region-specific social policies. The respective regional governments will work to promote retail trade, implement government support measures for local manufacturers to forge more effective partnerships with X5, and boost business activity in their regions.

Among other things, X5’s agreement with the Kamchatka Territory will make fish staples more affordable for consumers through direct supply contracts with producers. As part of this partnership, X5 will team up with the regional government to pilot deliveries of pollock and pink salmon, as well as other fish products, to central Russia for sale by X5’s retail chains at discount prices. The regional government will also assist producers in getting the support measures they need: preferential financing for domestic supply infrastructure projects, and the development of financial instruments to facilitate product purchases during the fishing season. In addition, measures will be designed to reduce transportation costs, including along the Northern Sea Route.

X5 Group will continue to increase its operations in the Russian Far East, including charitable programmes and partnerships with local producers, bringing locally sourced products to the shelves of its stores.

Stanislav Bogdanov, Director for Government Relations at X5 Group, said: “X5 is increasing its presence in the Far East and gearing up for further expansion into new regions. Our task is not only to provide residents of the Far Eastern Federal District with high-quality, affordable products but also to support local agribusiness. Fully supplying this market with locally sourced products still requires a lot of joint effort between businesses and the government, but we see potential here and expect the Far Eastern regions to only become more self-reliant as infrastructure and logistics evolve and local producers consolidate. This will benefit everyone, with consumers set to be the biggest winners.” X5 Group opened its first stores in the Far East in March 2023. The Company currently operates 45 Pyaterochka stores in the Far Eastern Federal District, including 21 stores in the Primorye Territory and 24 stores in the Khabarovsk Territory. Apart from the regional capitals of Vladivostok and Khabarovsk, stores have been opened both in large cities such as Komsomolsk-on-Amur, Amursk, Nakhodka, Ussuriysk, Bolshoy Kamen and Artyom, and in small communities as well. By the end of 2023, X5 expects to be operating a total of about 120 stores in the Far East.