“Magnet” was drawn to savings – Newspaper Kommersant No. 3 (7448) dated 01/11/2023

The growing trend towards consumer savings is forcing major retailers to focus more on the discounter format. So, Magnit can create a new chain in the economy segment, separating its pricing and assortment from its main format. Competition among discounters will intensify, but there is still potential for new players, experts say.

Magnit plans to create a new network of discounters, two sources told Kommersant who heard about this project. According to one of Kommersant’s interlocutors, the development of the concept of the new network began in 2022, in the first quarter of this year it can be approved, after which it is planned to open the first stores. He clarified that Anzhela Ryabova, who in November 2022 came to Magnit as director of the discounter format, and before that headed the Siberian group of companies Krasny Yar, should become the head of the new network. According to a Kommersant source, Magnit is still recruiting a team for a new project, including among the managers of its main competitors and regional networks. Magnit told Kommersant that they consider discounters to be one of the most promising formats and will increase their presence in the segment.

Since 2020, Magnit has been developing a network of discounters under the My Price banner. Stores occupy an area of ​​up to 300 square meters. m, and the range consists mainly of inexpensive goods and private labels (STM). According to Magnit’s own data, as of December 2022, there are about 700 My Price stores in 63 regions.

Mikhail Burmistrov, General Director of Infoline-Analytics, says that the My Price chain cannot be called a classic hard discounter, it is rather one of the Magnit formats with a reduced assortment, a smaller area and an expanded representation of private labels. According to him, it is expedient for Magnit to launch a separate format of a hard discounter under a new brand with its own pricing and assortment. One Story partner Olga Sumishevskaya believes that Magnit can start testing a second network of discounters in regions where the company already has developed logistics, has a loyal audience, and the maximum market share limit still allows opening new stores without closing existing outlets.

Discounters are one of the fastest growing formats on the Russian market. According to Infoline estimates, in January-September 2022, Torgservice Group (hard discounters Svetofor and Mayak) showed the largest increase in revenue among the ten largest grocery retailers – by 47.8%, to 296.3 billion rubles. year by year. NielsenIQ reported in the fall of 2022 that one in five Russians began to go to discount stores more often to optimize their budget.

X5 Group (Pyaterochka, Perekrestok, Karusel and Chizhik discounters) told Kommersant that they intended to become the leader in the hard discounter segment by 2026. Chizhik Managing Director Ilya Yakubson previously announced plans to approximately triple the number of discounters in the chain in 2023, to 1.5 thousand stores. According to Mr. Burmistrov, competition among retailers in the low price segment is intensifying. In the second half of 2022, Pyaterochka began focusing on hard discounters in pricing, which spurred other large retailers to cut prices on key indicator products, he says.

Although independent expert Irina Bolotova believes that the potential for the emergence of new discounters in the Russian market remains. The largest federal retailers are not yet represented in all regions of the country, and the number of regional players in the retail market may decline against the backdrop of the crisis, which will allow large chains to occupy the space they have vacated, the expert adds.

Alina Savitskaya