Retail in the Lower
Volga Region in 2006
Table of Contents
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Summary
A. Brief information
on retail trends in the Lower Volga
B. Current Situation in the Samara Region retail
D. Retail in Saratov
E. Retail in
Ulyanovsk
F. Retail in
Penza
G. Retail in Volgograd
H. Retail in Astrakhan
I. Logistics
Opportunities for
development
Contacts
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A. Brief information on retail
trends in the Lower Volga
The Volga region comprises 13.5% in RF retail turnover, Samara region
being the leader with 1.4% of Russia’s retail turnover. Traditionally, foods,
clothes and other consumer goods comprise the biggest share of Russians’
expenses. For example, the Muscovites leave 80% of their income in the shops,
the rest of the regions being not far behind. The analysts are positive about
the following main trends of retail development:
1) The retail structure is changing from open-air markets, which, in
some regions, currently comprise up to 60% of the market, to supermarkets and
shopping centers.
2) Consequently, the shopping centers are altering their outlay to
become more of an entertaining area, food quarters are still not being a
requirement but steadily becoming such. The popularity of combined shopping and
entertaining centers is considerably higher, as the balance between
expenditures on shopping and entertaining is some 40% and 60% correspondingly.
3) Most major retailers find their way to the regional markets, as
Moscow is overloaded with competing shops and chains and development is
unjustifiably costly. The choice of the regions is based on the investment
attractiveness, population and average income, and retail development.
The Volga Region has
one of the best-developed systems of retail, which is still growing due to large
chains expansion. The population of major cities of the region is around 1
million and average income per capita is steadily increasing. Hence, almost all
federal and international retailers of Russia are present at the market of the
Lower Volga region: food stores of “Perekrestok”, “Paterson”, “Ramstore”,
“Pyatyorochka”, “Magnit”; consumers’ electronics shops of “MIR”, “M.Video”,
“Eldorado”, “Technosila”; Metro Cash&Carry; DIY and household goods stores
of Castorama and IKEA.
The following part of the present report will examine retail development
in each major city of the region.
Samara region has the population of 3 243mln with the retail
turnover of $7.39bn in 2005.
Local retail chains are: “Samara-Product” (19stores), “Ostap” (11), “Merkury” (12), “Econom-Product” (7), “Bereg-Product” (3), “Atlant” (7), “Nash Kvartal” (4). Retailers from other regions, which are active on the federal level, in Samara are: “Magnit” (36), “Pyatyorochka” (8).
Retail chains in Samara started in mid 90s when the first stores of Cash
& Carry system opened. Presently, the city has the best-developed system of
local food retail chains in the Lower Volga. Gurman, Ltd (“Gourmet”) owns one of the oldest retail chains, Atlant with a 3 500 items range of
goods, own brand of foods and a system of discounts. Atlant chain is relatively small for Samara and has 5 stores,
primarily in the city centre.
The other oldest retail chain is Ostap,
the first store of which opened in 1995 in the city centre. Today Ostap has 11 supermarkets, eight of
which are in Samara, two in Togliatti and one in the satellite town of
Novokuibyshevsk. The supermarkets are located in quite different areas in terms
of population income, yet each of them is a profitable enterprise. The chain is
designated for middle class customers and is the only chain of 24 hours stores
in Samara. The range of goods is around 3 500-4 000 items and the
chain continuously widens the assortment. The chain was the first from
supermarkets to offer its customers services like grilled chicken and draught
beer. As a benefit for low-income customers it also offers basic groceries with
minimum markup.
Till December 2003 the market in Samara had two major competing chains: Samara-Product and Ostap, each of which had its own territory. Later more chains and
stores appeared. The plans of Samara chain operators make it evident that the
speed of market development is going up and the fight for customers should
become tougher. Nash Kvartal prepared
opening of its 4th store, other smaller chains, like “Khoroshy Shop”
and “Market-M” are growing by and by.
Samara Product chain has been the greatest success in
developing: it has opened several stores and mainly in the city centre. Their
strategy of stores location is singular and uncommonly aggressive for Samara as
stores were considered to be more advantageous in different areas of the city
and not in one. By 2005 the chain has got 19 stores in Samara, and was offered
to open a store at a trading centre in a satellite town of Novokuibyshevsk.
Today Samara is entering a new stage of competition in retailing. Rapid
market filling leads to the situation when several retailing operators open
stores in one and the same block.
Competition increases and, naturally, stimulates development: Kvartal, Ltd, the owner of the retailing
chain Nash Kvartal (“Our Quarters”)
is installing new equipment and planning to start its own food processing and
the retailing chain Ostap is
improving service and building new shops of about 600 sq m.
Local chain operators in Samara are developing facilities of limited
size in residential areas. As more and more new supermarkets open the retail
trade in Samara becomes similar to Moscow, where competing supermarkets work
“door to door”.
Samara operators proceed in developing residential areas market.
Besides, they are planning to improve the quality of work: local chains stores
are becoming more than just convenience shops. They extend the size of stores
and enlarge the choice of own-branded pre-made foods. Besides the supermarkets
and chain stores Samara has got several wholesale markets, the largest of which
are Rakita, Nord, and Samara.
The main factor that has been spurring the local operators is the
arrival in Samara of several Moscow retailing chains: Samara received new Perekrestok and Pyatyorochka. The former has opened 3 stores in Samara. The motto
of the chain is rather ideological as it emphasizes new opportunities that
population receives when shopping at their stores. Perekrestok stores in Samara are located at the largest shopping
centers and independent facilities and have got a parking lot, their own bakery
and grilling, meat and fish foods production, salads production, and mobile
operators service shops. The 1st store in Samara was the 50th store
of the chain and the first to offer its customers electrical goods among around
30 000 items assortment. The chain has opened another shop in Samara at
the end of 2005.
Pyatyorochka, the most popular food chain in Russia, according
to Profile magazine, with a turnover
of 1.4 bln rbls opened 4 stores in Samara by 2005. The stores are located in
different areas of the city, the first one being opened in a middle and
low-income residential area. The stores offer up to 3 000 items
assortment.
Magnit has become another federal chain retailer
which actively opens its stores, it is a chain-discounter with no glossy
shop-windows and relatively low service level, which offers up to 3 000
items including local brands and is popular with low-income population.
By the end of 2004 international food retailers opened their stores in
Samara: on December, 7 a Metro store
was opened in specially constructed premises and on December, 23 a Ramstore was opened in Moskovsky shopping centre on the
territory previously occupied by Paterson.
Deputy director general and marketing CEO of Ramenka Ozgur Tort claimed 70% of the food in the shop to be from
local providers and thus well known to the customer. In case of successful
partnership they are able to provide their foods to the stores in other cities.
The assortment volume of Ramstore is
35 000 - 40 000 items, 5% of which are Ramstore
private labeled: drinking water, milk, juice, instant coffee, paper goods,
detergents and linen conditioners as well as its own bakery. The personnel for
the new store were hired from the locals. The store itself employs 300 people,
the maintenance personnel includes up to 1 000 people. As for turnover volume,
the company expects to get minimum 5 000 receipts of average $20 a day. Ramstore retail goods are oriented on
customers with slightly lower income than Paterson
and Perekrestok as the large part of
goods are produced in Turkey and are cheaper. Moreover, numerous sales on the
level of dumping and loyalty club discount cards have become the distinguishing
feature of Ramstore. Given the fact the store is located outside
the city centre the company started a free bus rout to the shop from the bus
station.
The company plans to open two more shops in Samara and one in Togliatti.
The closest plans of the company are associated with Moskovsky Megacomplex proprietor Victor and Co. Its owner Victor Surkov announced investing $1.5 mln
in the premises for Ramstore and
would expect the payback in 4-4.5 years. Ozgur Tort announced the company
investments in the first 8 000 sq m Ramstore
in Samara to be $2 mln. The parties have agreed upon partnership at a new
complex Mega City currently under
construction and to be opened in the beginning of 2006. Ramstore is to occupy 6 000 sq m there. In Togliatti the
company is negotiating with the mayor’s office upon purchasing a land lot for
building a shopping centre.
In Samara the company plans to eventually build its own shopping centre
of 30 000 sq m and $25 mln investments worth, Mete Doguoglu said in his
announcement to the newspaper Kommersant. Strategic planning department director of
Samara largest developer Group of
Companies “Vremya” Dmitry Baranov pointed out at the regional expansion
boom among the chain operators due to relative saturation of Moscow. He also
noted the growing competition on Samara’s trading real estate market, which
should make the new centre extremely valuable by the moment of completion. Mete
Doguoglu declared 70% of existing partners of Ramstore as probable anchor leasers of the centre. The retailer has
plans to open 3 more stores in Samara.
Samara branch of Paterson has got 2 shops in Samara. The
assortment of the stores contains 12 000 items, among which are most
popular foods and other products. The providers include time-proved and
experienced partners of Paterson who
guarantee high quality and regular supplies of fresh products. The store also
has got pre-made and hot foods production as well as its own bakery. The stores
are open from 9 till 23 o’clock and have 6-11 check-out desks. The territory
varies between 780 and 1 300 sq m. In addition to its two shops,
“Paterson” plans to open a boutique of food in a new elite shopping center
“Molot”. The format is seen as the most suitable for the location and promising
in development of exclusive foods.
Paterson announced plans for opening 3 more stores in
Togliatti. In December 2004 the chain started franchising policy. The
franchisee will have to pay from $20 000 for a single shop to $ 100 000
for a right to develop a whole region. This sum almost equals to the
organization expenses and is caused by desire to enlarge the turnover of the
partner and mutual profits.
The small wholesale operator Metro
opened its store in Samara on December 7, 2004 in specially constructed
premises on Moskovskoe Shosse, 18th km. The territory of the store is 15 000 sq m, the trading
territory is 9 000 sq m. The volume of the investments for building was
around $20 mln. The store should reach self-repayment in 3-4 years. The assortment
of the hypermarket is 20 000 items including foods, audio and video
equipment, household supplies. Local producers provide 25-30% of the assortment
and 80% of the assortment is produced in Russia.
Metro is the first wholesale store in the region and
is seen as a large competitor to small wholesale markets. Marketing director of
Samara trading house Region-Opt
Natalia Cherkasova foresees the prices at Metro
to be about 10% lower than the existing on Samara wholesale market. Besides,
the analysts say the store should attract more customers due to its more
convenient and comfortable format as opposed to the markets. Still, CEO of Aton Samara branch Inga Gontareva is of
opinion the wholesale market is not filled up yet and the customers will
suffice. Besides, the new store is outside the city centre is not conveniently
located for everybody.
The wholesalers specialized in one particular group of products, such as
alcohol production, should not suffer from a new competitor. CEO of
St-Petersburg hypermarket chain Lenta
Oleg Zherebtsov thinks that the opening of a Metro store in St-Petersburg in spring 2003 did not lead to any
overt changes on the market and the situation should not be different in
Samara. The negative features of the Metro
chain are accreditation system for clients and alien assortment matrix common
for western small shops rather than for Russia.
Samara abounds in
non-food retail chains: “Marafon” (footwear shops), “Jeans Symphony” (jeans
wear), Mango (clothes for young people), Adidas (sportswear), “Darom.ru”
(“Free.ru”), a Moscow clothes retailer with 100 shops in different regions of
Russia, started expansion in Samara with 6 shops and had plans to open 5 more
shops in major shopping centers. The retailer is aimed at young people.
Yet, Samara market seems far from being filled up. The development of
federal and foreign chain operators is held back by the lack of facilities over
1 000 sq m which they prefer. Practically all hyper-size supermarkets are
located on the main transport thoroughfare of the city – Moskovskoye Shosse: Paterson, Perekrestok, Metro, Ramstore make this street a real shopping
avenue.
Besides, there are plans to tie shopping and entertainment services in
Samara to make the largest shopping centers similar to American malls for the
whole family to spend a part of the weekend. Currently Samara has only one
joint shopping and entertaining area,
Megacoplex Moskovsky with 33 bowling lanes, 80 billiards, several cafes, an
aqua park and 6-screen cinema theatre.
Construction of a chain of world standard shopping centers in most areas
of Samara has been recently announced, but all the details remain undisclosed.
The most ambitious developers say in 1-1.5 years Samara should receive at least
five more similar projects. The city is witnessing several constructions where
trade will be accompanied by leisure facilities, namely, the second part of the
shopping centers Park House, Aquarium and Imperia. The GC Vremya is
planning to allot for entertainment purposes one whole store of Park House second part, a three-stored
34 000sq m building to be completed in approximately one year. Strategic
planning department director of “Vremya”
Dmitry Baranov stressed the fact that in Volgograd branch of Park House the recreation centre caused
50% shopping increase. Aquarium’s
second part is planned to allot 60% of its territory for recreation area with
cinemas, restaurants, children area, bowling and probably a casino.
Samara developers try to invite Moscow entertaining operators for
partnership, as the local ones appear only to be capable of organizing food
quarter’s part. Attracting several operators for one entertainment center is
the most common variant of development, for example the children leisure centre
Crazy Park is the result of two
Moscow companies’ partnership – MultiComplex
and Premier Park. Ivestkinoproject
will run the entertainment area of the new Park House including the
food-quarters except for the bowing centre, which is to be a part of. Moscow
and foreign entertainment operators interested in Samara include the following:
Ivestkinoproject, Kinomax, Raising Star,
Formula Kino, Cinema Park, and Plachain Bowling. The restaurant operators
include Rosinter Restaurants, McDonald’s, Yum! and Sbarro.
The projects with a shopping and leisure frame have arrived in Russia
relatively recently but present to be the most profitably on the world market.
As Russian customers grow more and more demanding in terms of service and
quality, the new generation of shopping centers should provide opportunities
not for shopping only but for recreation as well. Cushman & Wakefield consulting agency is of opinion that such
complexes are the most promising in the market. The press centre of Megacomplex Moskovsky states that any
region would be interested in obtaining a modern mall with restaurants,
cinemas, children area and recreation areas where people can both shop and
enjoy their free time.
In March 2006 a new
58 000sqm shopping and entertaining center “Mega-City” is to be opened. It
will have a “Ramstore”, a variety of non-food stores, a children’s playground,
food quarters and recreation area. The investment for the project is over
$43mln.
C. Retail in
Togliatti
Togliatti
(750 000citizens, the economy is mainly based on AvtoVAZ and other
automotive related companies) is experiencing a retail boom. Large
international and federal retail chains strive at expansion in the city, yet
the market is reported to be far from saturation and competition is mild. The
state statistics committee announced Togliatti retail turnover per capita the
second biggest among the Russian regions. In January-May of 2005 the retail
turnover reached $2.93bn, having exceeded the same period of 2004 by 7.4%.
Due to such a favorable feature of the city as lower deficit of trade areas and prices for them, some retail chains prefer Togliatti even to the regional capital, Samara. For example, the second “real” hypermarket in Russia, with 7 000-10 500sq m of area and a range of goods of 11 000 food items and over 9 000 non-food. Local production is to take up no less than 20% of the range. The total investment volume of the hypermarket was 24.4mln euros. The hypermarket will execute the purchases through Metro Group Buying, thus offering lower prices. The hypermarket is located in large-scale 78 000sq m shopping and entertaining center “Park-House”, constructed by “Marta”. The investment into construction reached $80mln. To keep up with the growing competitors, “Perekrestok” and “Paterson” plan opening one more 1 000sq m store each.
Presently such major
food retailers as “Perekrestok” (2 stores, Moscow), “Magnit” (over 30 stores,
Rostov), “Paterson” (4 stores, international), “Pyatyorochka” (2 stores,
Moscow) and Samara chains “Bereg-Product” and “Ostap” share the food market of
the area. “Metro Cash & Carry” (Germany) is to open a store in 2006 and
“Ramstor” (Turkey), “O’Key” (St Petersburg), “7th Continent” and
“Mosmart” (Moscow) mull entering. Local retail chains are not numerous, still
present: “Posadsky” with 20 stores, “Yeliseysky” with 9 stores and “Mindal”
with 5 shops. The local shops are often criticized for lack of knowledge of
modern retail technologies, yet are quite successful in the format of
“convenience shops”.
In December 2004 Paterson opened its store at AvtoVAZ,
JSC and distributed 10 000 3-10% discount cards among the workers of the
plant. The measure is considered to be one of the most promising if uncommon to
some extent. The plant is the largest enterprise of the city with the
population of 750 000 with the wages among the largest in Russia.
In 2006 6 large
shopping centers with the area from 24 000 to 49 000 sq m are to be
opened, the City Consumer Market Department reported, with the total commercial
area reaching 300 000sq m in the next three years. Currently retailers are
exploring distant and residential areas.
The mainly developing
non-food retail in Togliatti is consumer electronics branches: “Mir”, a Moscow
founded store, has opened its first store in Togliatti and the sixth in the
Volga Region and intends to open one more in 2006 to take over 20% of the local
market. The investment volume in the 2 500sq m store reached
$900 000. The goods policy of the store is to divide the stock into 60%
for middle class, 20% for under-middle class and 20% for more well off customers.
Another promising
area of non-food retail is souvenir market, which was almost non-existing in
Togliatti before arrival of “Red Cube”. The chain store opened 2 shops in
Togliatti and intends to develop further. The policy of the store is flexible prices,
constantly renewable stock and growing number of shops.
D. Retail in
Saratov
Saratov region has a
population of 2 643mln and 2005 retail turnover $1.32mln, which is 15.0% higher
than in 2004. In the whole the retail of the region is less developed than that
of Samara and Togliatti and thus may present the largest opportunities for
development as the income of the population is growing.
The largest investment projects in the region are: - Late 2005 Metro Cash&Carry and the oblast administration signed the intension agreement for construction of a store in Saratov, the details remain undisclosed. - IKEA intends to complete construction of its store by 2007 or even sooner, the investment volume is to reach $100mln. - A year before “Perekrestok” was about to open several stores of its chain in Saratov and two towns of Saratov region, yet the plans were suspended. – “Torgovy Quartal”, a Moscow developer plans to open a 76 500sq m shopping and entertainment center by Q4 of 2006.
The retail system consists of mainly local food
chains: “Pyatyorochka” (Moscow, 13), “V Yablochko” (Saratov, 40 stores),
“Bunch” (Saratov, 28), “Magnit” (Rostov, 40), “Socialism” (Saratov, 19),
“Minima” (Saratov, 8). “Marta” holding has sealed a memorandum of strategic
partnership in running 4 supermarkets “Grossmart” (to be opened by 2007) and 40
discounters “V Yablochko”. The plans are that supermarkets “Grossmart” will
control increasing share of the market. Currently “Marta” has re-branded 18
existing supermarkets “Prodmak” into “Grossmart” and opened the biggest in the
city supermarket (14 000 items) on the first floor of the shopping center
“Pentagon”, the second being occupied by a customer electronics shop “M.Video”.
The shopping center is one of the few centers in the city with food quarters
and a boutique zone.
Saratov non-food retail consists of consumer electronics shop “Mir”,
which invested $1mln into its store in the city (10 000items) in late 2005
and “M-Video”.
E. Retail in
Ulyanovsk
Ulyanovsk has the population of 1.380mln and retail turnover in 2005 was
around $1.35mln. The city displays a growing power of consumption (18.7% growth
against 2004) as the disposable income grew 24.8%. The supermarkets and retail
chains are reported to have above average revenues.
The major development trends currently are:
- A retail chain “Tovarish, Ltd” has purchased a license from CJSC “Spar
Central Russia” for re-branding 35 stores in Penza and Ulyanovsk regions. The
chain intends to invest $10-15mln in expansion during a two- year period. Thus
the brand will be present in two variations – smaller “homey little shops” and
larger supermarkets. The chain stakes at bettering service and enlarging
selection of goods to attract more customers, yet, the prices will be higher
than the former format of “Tovarish”. To retain customers with lower income the
chain plans to implement loyalty schemes. The only competitor to the chain may
become the Kaliningrad based group of companies “Victoria”, which is present in
the region with 3 supermarkets “Quartal”.
- Metro
Cash&Carry and the oblast administration discussed investing 17-18mln euros
in construction of a store in Ulyanovsk by Q3 of 2006. The store is to be
8 500sq m large and have a selection of 25 000 food and non-food
items.
F. Retail in
Penza
With the population of 1422mln, Penza region presents to be one of the
fast developing cities of the Volga Region, both food and non-food retail
turnover in 2005 being some 10% above 2004 ($611.6mln and $798.5mln
correspondingly, totaling $1.4bn).
The major retailers in the region are “Tovarish, Ltd”, with 28-29% of
the market, “Magnit” (32stores), “Paterson” (4stores).
The main development trends are:
- Re-branding of “Tovarish” discounters into “Spar” supermarkets and
intended opening of 10 more supermarkets (totaling 30 stores), thus growing the
revenue up to $100mln.
- Entering of “Perekrestok” in spring 2006
G. Retail in
Volgograd
The population of the region is 2 673mln.
In 2005 the retail turnover in the region was $3.5bn, which is 15% above 2004.
The region has a growing number of retail chains of all levels – hypermarkets
of “Perekrestok” and “Ramstor”, discounters “Radezh” (52), “MAN” (19 shops),
“Pyatyorochka” (40), “Magnit” (56) and convenience shop chains “Vishenka”,
“Athens” and “Kaspiy”. The best-developed retail formats is discounter but
large retail chains intending to enter the region may change the balance to
hypermarkets and “convenience shops”.
Both hyper store retailers in the region are
rapidly growing: “Ramstore” of Ramenka runs a store in Volgograd and has
recently opened a 3 500sq m store in Volzhsky, a town in Volgograd region,
investment volume for the latter being $1mln. Development intensions include
another store in Volgograd in summer 2006. Another “Perekrestok” will be opened
in the brand new center in 2007.
New to the region operators are entering:
- “Mosmart”, a Moscow chain of hypermarkets
plans to include Volgograd in its regional development;
- “DVI” investment group mulls construction of
a shopping and entertaining center and introduces the retail chain “Carousel”
(affiliated with “Pyatyorochka”)
- “Metro Cash&Carry” negotiated
construction of a 30 000 sq m store in late 2005.
- “Seventh Continent”, Moscow have plans to
open a chain of 5 hypermarkets in Volgograd, starting with investing over
$20mln in a pilot shopping and entertaining complex with a hypermarket,
food-quarters, and a cinema.
Two local chains have reached the stage of
expansion to other regions:
In Volgograd there is the largest franchisee
of “Pyatyorochka”, “Tamerlan”, with 107 stores in Samara and Volgograd regions.
Presently “Tamerlan” is entering the neighboring Rostov region, fearless of
numerous local competitors, and with plans to open 20 stores in each region in
2006 and later 2 stores a month.
Another ambitious Volgograd retailer ready to
enter regions nearby is “Radezh”, with 11 supermarkets and 42 discounters in
Volgograd region. The chain is being serviced by two distribution centers. The
chain operator mainly aims at market customers, which comprise some 60% of the
population within a radius of 500km away from Volgograd. The retailer allocates
some $10mln for its development in 2006, intending to begin with Rostov region.
3-4 shops are to be open in a large town of Volgodonsk and 6 in the neighboring
settlements, thus increasing “Radezh” stores by 40%.
Analysts see the
following opportunities for expansion: opening new shops, including re-branding
of old fashioned “soviet” style stores (yet the existing facilities are already
running short), price policies and customers’ demand studies. Another trend of
development may become joining food and non-food retailers: “In the order of
things”, Ltd, a franchisee of “Stock-Center”, opened 4 stores at “Pyatyorochka”
and there are plans for more, as the two chains aim at “budget” customers. The
clothes discounter will share up to 50% of “Pyatyorochka” stores’ space in
Volgograd.
H. Retail in
Astrakhan
Astrakhan has the population of 1 032mln, retail turnover almost $1bn in 2005. The major employer for the region is “GazProm”, with 20 000 employees.
The food retail in the region is shared between three major players: the
hypermarket “Lenta” (St Petersburg), a franchisee of “Perekrestok” (Moscow),
and local “Astor”.
“Perekrestok” gave its first franchise contract in the region to
“ProdMix” (Moscow), which is investing some $1mln in an area with total
1 700sq m at the newly opened shopping and entertaining center “Grand
River”. The project as a pilot one and analysts see it as the most promising
for chains development in the regions.
Its competitor “Lenta” stakes at a larger store area with goods storage
right above the counters, which ensures a large flow of customers and lowers
expenses.
The local “Astor”, the largest local shopping and entertaining centers,
plans to invest $15-20mln into the second line by 2007 under the trust
management of “Torgovy Quartal”, Moscow. “Astor” acts in line with the general
development trend in the regions, which presupposes obligatory expanding of
entertaining facilities – a bowling, a cinema, a skating ring, and food
quarters.
I. Logistics
The Volga region comprises 13.5% in RF retail turnover, Samara region
being the leader with 1.4% of Russia’s retail turnover. Yet, the logistical
infrastructure is to be developed, which presents the main problem for retail
surge. The great volume of retail and consumer goods has created a shortage of
stock facilities and logistic tension. One of the acute problems for retail is
location and supplying. The retail development in Russian regions started with
utilizing existing facilities, such as old buildings in the city centers, which
did not have all the things required for a modern shopping center. Presently,
the land lots for construction of shopping centers are very often assigned
instead of being selected, the fact shooing large anchor leasers.
The Volga, a water
rout is not being used at all, the whole mass of fast-moving consumer goods
arrive in containers from Moscow and St Petersburg. Creation of logistic centers can bring considerable advantage in
terms of delivery and expenditures, and consequently a number of developers are
investing into construction of facilities.
Also almost each
major retailer present in the Volga region, such as “Perekrestok”, “Ramenka”,
“Tander-Samara” (a franchisee of “Magnit”) and “Metro Cash&Carry” is
thinking about creating additional distribution centers in Samara or other
cities of the Volga region, whereas recently they are forced to use logistic
outsourcing, burden the overloaded storages in Moscow or use regional logistic
centers which are not always efficient enough. The local food chain
“Samara-Product” has opened a distribution center in early 2006. “Samara Logistic Company”, a partner of
“Eldorado-Povolzhye” (a federal chain of consumer electronics goods), owns a
distribution terminal in the suburbs of Samara and plans to create three more.
The only third party logistic operator in Samara region is Russian Logistic
Service, National Logistic Service has intensions to develop their work in the
region.
Opportunities for Development
Upon considering the current situation in the Lower Volga retail market, it is clearly seen that retail is one of the most rapidly growing businesses with a lot to offer to a wise investor even in the least prosperous parts of the area, like Ulyanovsk and Penza. It is especially true for non-food retailers, namely clothes and footwear, household, DIY goods and souvenirs. This sector is only starting to develop in the region, the main share of goods is being offered by open air and enclosed markets, where the service and range of goods leave a lot to be desired.
Another promising
sector of business is service sector, especially logistics and storage
services, which development is totally insufficient for the present booming
retail. Distributing and logistic centers are scanty and of relative quality,
thus their work is not efficient enough and presents a hold-up for speedy
execution of large-scale deals. Only new centers are being planned and under
construction in Samara, though the city has traditionally been a joint point
for central Russia. A lot of major retailers are forced to set up their own
centers, even though they are more apt to leave supplies and delivery to
outsource companies. Present construction of storage facilities cannot satisfy
the demand as well, even though the value of such premises is constantly
increasing, especially cooling storages for perishable goods. These gaps are
yet to be filled in by new players.
Contacts
Marina Johnson,
Representative in Samara, Lower Volga and Southern Russia
Office 293, D
Moskovskoe Shosse, Samara 443013 Russia
Tel/fax: +7 (846) 278
82 03
Email: bisnis@samaramail.ru
www.bisnis-eurasia.org in Rus
Alexander
Vasilievich Rumyantsev, Director
1 Nevskaya
street, Samara 443100 Russia
Phone: +7
(846) 332 09 68
Fax. (846)
335 45 07
Email: sdep@samara.aris.ru
Middle Volga Chamber of Commerce and Industry
Boris Vasilievich Ardalin, Chairman
Address: 6 Tolstogo
street, Samara 443043 Russia
Phone: +7 (846) 332 11
59
Email: svtpp@vis.infotel.ru
Togliatti Chamber of Commerce and Industry
Vladimir Anatolievich
Zhukov, President
19-A Pobeda street,
445000 Togliatti Samara Oblast, Russia
Phone: +7 (8482) 22 47 34
Fax: +7 (8482) 22 48
37
Email: tpp@ccitogliatti.ru
Web Site: www.ccitogliatti.ru
Volgograd Agriculture and Food Supplies
Committee
Pavel Pavlovich Chumakov, Chairman
9, Lenina Prospect, 400098 Volgograd
Tel.: +7 ()
309551, 309552
Astrakhan Trade, Catering and Services
Department
9, Rosy Luxemburg St, 414000, Astrakhan Tel.:
+7 (8512) 223950, 228519, 221767
Fax: +7 (8512)
229514
Saratov Economic Development and Trade
Ministry
72, Moskovskaya St, 410042, Saratov Tel.:
+7 ()273200
Paterson Head Office 51, building 1,
Birulevskaya St, 115372, Moscow
Tel.:
+7 (495) 7807450
Fax:
+7 (495) 7807431
E-mail: info@paterson.ru
Web: www.paterson.ru
Ostap
Head Office
122-A, Avrory St, 443045, Samara
Tel.: +7 (846) 2678200 Email:
info@ostap.ru
Web: www.ostap.ru
Pyatyorochka Head Office
8, Predportovaya St, 196240, St
Petersburg
Tel.: +7 (812)-723-1387, (812)-327-8136, (812)-723-0211
Fax: +7 (812)-723-0441
Email: kachestvo@tdl.spb.ru Web:
www.e5.ru