Lenta bought the Monetka chain of stores

The fourth-largest grocery retailer in Russia, Lenta, owned by Alexey Mordashov, is strengthening its position in the small-format store segment. The company closed the acquisition of the Monetka chain, which operates 2.1 thousand points of sale in the Urals and Western Siberia. The buyer plans to preserve the Monetki brand and expects synergy from combining purchases. It is becoming increasingly difficult for medium and small chains to compete with federal players, analysts say.

The Lenta retail chain acquired the Monetka chain, which operates 2,100 convenience stores, Lenta reported on October 17. Most of Monetka’s outlets are located in the Urals and Western Siberia; the average retail area of ​​one store is 290 sq. m. m. The deal also includes five distribution centers with a total area of ​​116 thousand sq. m. m and a fleet of trucks. In 2022, the revenue of RM Group, the parent structure of Monetka, increased by 29%, to 177.8 billion rubles. In the first half of 2023, the figure increased by 16.8%, and like-for-like (LfL) sales by 8.7%, Lenta said. The cost of the transaction was not disclosed; the company’s own funds and debt financing were used for the purchase.

Kommersant sources say that Lenta is negotiating the purchase of Monetka spoke in July. General Director of Infoline-Analytics Mikhail Burmistrov estimates the cost of Coin at 65 billion rubles. “Monetka” is one of the fast-growing regional FMCG chains, whose gross profit margin in 2022 exceeded that of “Lenta”, “Krasny & Bely”, Metro and “Svetofor”, the expert noted.

Lenta reported that the Monetka business will continue to operate as a separate structure, and the stores will retain their existing brand.

Further growth of the “convenience store” format will also be due to the opening of points under the “Monetka” sign, according to Lenta materials. It notes that the deal will increase the retail space of small format stores by 2.4 times, to 902 thousand square meters. m and strengthen the company’s position in terms of “purchasing power”. According to Mr. Burmistrov, Monetka is distinguished by a verified assortment and high efficiency, so it is logical and expedient to use the concept and brand for small formats, which are objectively problematic for Lenta.

Chairman of the Board of Directors of Lenta Alexey Mordashov said that the deal will give new impetus to the development of the group, strengthening its position in the regions and increasing its share in the food retail market. According to Lenta CEO Vladimir Sorokin, the next step will be to combine purchasing conditions and search for synergies in logistics, IT and other processes to increase business efficiency. General Director of Monetka Irina Smirnova added that the team of this chain will continue to develop the segment of convenience stores even after the deal with Lenta.

Senior analyst at Gazprombank Marat Ibragimov notes that Lenta aims to develop through organic growth and M&A, and regional small-format chains are a logical target for acquisition. According to him, competition for medium and small grocery chains without specialization in any assortment will only become more difficult. Lenta, the analyst adds, has experience in integrating the Billa and Semia networks. Mikhail Burmistrov says that the challenge will be to replicate the Coin format in new regions and select a new leader. The success of the network was played by the former owner Roman Zabolotnov, who was deeply immersed in operational processes, the expert points out.

Anatoly Kostyrev