Products have slowed down – Newspaper Kommersant No. 233 (7434) of 12/15/2022

Major grocery retailers experienced a slowdown in revenue growth in the third quarter of 2022 compared to the second. In general, the chains included in the top 10, from July to September, gained almost 2 trillion rubles. Experts believe that the reason for the current situation, in addition to reducing their spending by consumers, was the deceleration of food inflation.

According to Infoline calculations, in the third quarter of 2022, the total turnover of the ten largest chains selling food and fast-moving consumer goods (FMCG) reached 1.97 trillion rubles. excluding VAT, which is 17.9% more than in the second quarter, and 20% year-on-year. In general, in the first nine months of 2022, retailers’ revenue growth accelerated to 24.8%, with turnover amounting to RUB 5.7 trillion. without VAT, estimated in Infoline.

However, the figures for July-September this year in terms of revenue growth were 5 percentage points lower than in April-June. This may indicate a slowdown in food inflation, said Marat Ibragimov, senior analyst at Gazprombank. In addition, he notes that the decline in household incomes that has continued in recent months is reflected in demand: buyers are switching to cheaper brands and private label goods (PL) of chains. This leads to a decrease in the average check, the analyst adds.

According to Infoline, in the third quarter, sales grew faster at Torgservice Group, which manages networks of hard discounters Svetofor and Mayak (by 32.5% year-on-year, to RUB 106 billion), Mercury Retail Group, which develops alcohol markets Bristol and Red & White (by 32%, to RUB 244.2 billion) and Vkusvill (by 27%, to RUB 48.1 billion).

At the same time, the first place in terms of revenue among FMCG retailers according to the results of the third quarter was retained by X5 Group: the company’s turnover reached 646 billion rubles, which is 19.5% more year-on-year. The second place belongs to Magnit, whose revenue, according to Infoline, grew by 21% year-on-year, to 575 billion rubles. Officially, Magnit has not yet announced operating results for the third quarter of 2022. The Kommersant company did not provide a comment.

According to Infoline, the hypermarket format showed the least positive sales dynamics. Thus, while Lenta’s small formats grew by 31.8% year-on-year, sales in the network’s hypermarkets grew by only 1.8%. With the growth of revenue of discounters “Yes!” (part of O’Key Group) by 54.8%, sales in O’Key hypermarkets decreased by 1.2%. Against the background of reduced traffic in hypermarkets, a number of retailers accelerated the transition to an omnichannel model: the share of online sales in Lenta’s total revenue increased by 0.6 p.p. to 5.7%, while Auchan’s — by 3.3 p.p., up to 6.8%, according to the Infoline study.

Lenta noted that they will continue to develop small formats and increase the share of online sales. In “Asha” previously reportedthat they do not plan to open new stores in 2023, but will increase their turnover through online sales.

At the same time, the highest indicators in terms of the share of online sales in the revenue structure for the first nine months of 2022 were shown by Metro and Vkusvill – 35% and 37%, respectively, estimated in Infoline. Vkusville says that by the end of November, they increased the share of online sales to 40%. Metro plans to further develop the delivery segment, including through the assortment from local suppliers. X5 Group expects convenience store and discounter formats to be the fastest growing in the coming years.

Mikhail Burmistrov, General Director of Infoline-Analytics, notes that the slowdown in the dynamics of food retail turnover in the largest FMCG networks will continue. The fourth quarter of 2022 is characterized by a decrease in consumption in most categories of food products in physical terms and a slowdown in inflation, which is already below 10% year-on-year on the shelves of the largest chains, the expert points out.

Marat Ibragimov believes that medium and small retailers will be more sensitive to the decline in consumer demand. In order to retain customers, according to Mr. Burmistrov, chains will continue to increase the share of promotional, private label and low-price goods.

Alina Savitskaya