21 February 2024

X5 launches Agri-Aggregator Platform in Sverdlovsk Region

Yekaterinburg, 21 February 2024 – X5 Group (“X5” or the “Company”, LSE and MOEX ticker: FIVE), a leading Russian retailer, announces the launch of an agricultural logistics operator in the Sverdlovsk Region that will collect local farm produce to be sold at X5’s Pyaterochka retail stores. The opening ceremony for the platform, which is based in the city of Sukhoy Log, was attended by Sergey Klyuyko, leader of the Aggregator project run by the Pyaterochka retail chain, as well as by regional authorities and local agricultural producers.

The agri-aggregator is a hub to collect regional farm produce, where products from small farms are put together in batches for centralised delivery to Pyaterochka stores. This enables local farmers with volumes not large enough to warrant a supply contract from a major retailer to come together under the operator’s umbrella and set up a permanent sales channel to supply their products to retail chain stores. 

The aggregator is responsible for arranging product collection as well as for sorting, packing, grading, washing and labelling, while also providing temporary storage and transportation to the chain’s distribution centres and stores. In addition, the aggregator provides comprehensive legal and accounting support for sales, along with quality control in collaboration with X5. In turn, Pyaterochka guarantees purchasing volumes for farmers in line with the stores’ needs and coordinates the pricing policy. 

The storage and sales hub measures 4,800 square metres and expects to support the delivery of at least 9,000 tonnes of local farm produce to Pyaterochka. Farmers will set up a sales channel for soup vegetables, including potatoes, beets, carrots, cabbage and squash.

This engagement model will help X5 to partner with farmers who are not yet able to start supplying the Company’s retail chains on their own while also boosting the share of local products on X5 store shelves. A pilot agri-aggregator was launched in the Lipetsk Region in 2023. In 2024, X5 plans to scale up the project by launching up to 10 similar hubs in various regions and connecting the Perekrestok supermarket chain to the initiative.