Lenta to scale back openings
Lenta boosted sales 35 percent last year to 194 billion rubles ($2.82 billion) after opening more hypermarkets than planned, the St. Petersburg-based retailer said today. The gain exceeded the 32 percent revenue increase posted by PJSC Magnit, Russia’s industry leader, and growth at other competitors.
Fourth-quarter sales gains at Lenta slowed to 31 percent because of discounting campaigns to attract customers amid surging inflation. Lenta will “optimize” plans for new stores this year to keep high “a healthy balance sheet” amid economic challenges, Chief Executive Officer Jan Dunning said in the statement.
Magnit, X5 Retail Group NV and OAO Dixy Group, Russia’s largest food retailers, managed to increase fourth-quarter sales by at least 20 percent even as inflation reached a five-year high by December, eating up consumers’ income. The ruble plunged 46 percent last year as falling price for oil, Russia’s major export, compounded the effects of U.S. and European sanctions over Vladimir Putin’s incursion in Ukraine.
“Consumers’ budgets are under increasing pressure and Lenta’s low-price, low-cost business model positions us well to meet these changing customer needs,” Dunning said. “It is clear that the economy will face further challenges in 2015.”
Source: bloomberg.com
