7 June 2017

X5 partners with Acmero and Marathon Group on Universal retail centres for passengers

Moscow, 7 June 2017

X5 Retail Group, a leading Russian food retailer, has made a trilateral partnership agreement with Acmero Capital, a private equity fund, and Marathon Group, an investment company, to develop state-of-the-art universal retail centres at passenger transport hubs (Passenger Service Centres, or PSCs).

The agreement was signed by X5 CEO Igor Shekhterman, Acmero Capital Senior Managing Partner Siman Povarenkin, and Marathon Group President Alexander Vinokurov. As part of the project, the parties expect to open around 600-1,000 PSCs at bus and railway stations, roadside facilities and airports across Russia by the end of 2021. PSCs will offer a selection of state-of-the-art services under one roof, including Pyaterochka grocery stores, pharmacies operated by Marathon Group, catering facilities by Acmero, ticket booths, parcel lockers, ATMs and payment terminals. The mix-and-match service format will be tailored to the needs of each specific location.

A geographic information system (GIS) in use at the Pyaterochka chain since 2014 will help choose the optimal location and the most economically viable format for each PSC.

“In Russia, an average of 50 million people use public transport daily. This passenger traffic is ripe for converting into retail sales. According to X5’s calculations, passengers at bus and railway stations may become important contributors to the traffic of grocery stores and catering facilities. The project is especially beneficial for smaller cities, where bus and railway stations are often big gathering areas, but do not have modern developed retail infrastructure” said Igor Shekhterman, CEO of X5.

“This is an exciting business idea and a retail format that guarantees demand and good development potential. In our highly mobile living environment, transport hubs attract multitudes of people, and the footfall matters as much for pharmacies as it does for stores and food courts. Marathon Group has all the expertise and resources required for a pharmacy operator in a large-scale project like this. In addition, we already have an extensive track record with Х5 Retail Group, so we are very confident about the success of this partnership” said Alexander Vinokurov, President of Marathon Group.

“This is an unjustly forgotten idea that is very much in line with our modern needs. It has the potential to fundamentally change the notions of convenience and travel in Russia. We are looking to breathe new life into old transport stations, which may involve construction of new facilities from scratch, for example, on major roads. This requires large-scale partnerships with transport infrastructure operators, and, importantly, the largest industry players have already shown their openness to cooperation and a proactive approach” said Siman Povarenkin, Senior Managing Partner at Acmero Capital.