Anyone who visits retail chains regularly is an important part of our lives. And who takes the leading positions in the market of consumer goods? How is the market situation changing? Let's talk about the largest networks in Russia, compare their main indicators.
Retail and retail: what's the difference?
When reading texts about trade in products, you can find two terms “retail” and “retail”. Is there a difference between these concepts. In the scientific literature, they are used as absolute synonyms. In fact, the word "retail" literally translates from English, like retail. However, in the practice of professional communication, a gradual breeding of these concepts is observed. The phrase "retail" means all formats of sales to end consumers of a wide variety of goods, from food to household appliances and even cars. And by the word "retail" more often they mean precisely the trading "web". And more and more often in use they reduce this term to the designation of grocery retail chains, even such a phrase as grocery retail appears. Thus, in terms of language, there is no difference between these words. But in the practice of word usage, a separation of these concepts is planned. In this article, the terms “retail chains” and “retail” will be used as synonyms. This corresponds to world terminological practice.
Retail in Russia
The history of retail sales has an old tradition; it dates back to Old Russian fairs and peddlers. Over the centuries, trade has gone through several stages of evolution, and today in Russia you can see all formats and types of retail. At the present stage of development of the Russian economy, the largest sector is retail. A retail network today is the most common way to distribute goods. The market consolidation process has been going on for the past 20 years. Small players squeeze and absorb the network. This process already covers not only big cities, but also very small settlements. All networks try to diversify the number of store formats in their networks. Each retailer tries to offer stores for consumers with different needs.
The growing competition between retail chains is a favorable situation for the consumer. Since in the course of the competition, retailers are forced to lower prices, fight for the buyer, offering him various promotions, think about expanding the assortment, about the quality of goods, about the level of service, the consumer gets more choices and the opportunity to buy quality goods at lower prices. Now the grocery retail market in Russia has reached a saturation stage; retail chains are experiencing additional pressure from online trading. All this leads to the fact that the competition between the largest players in the food retail market is intensifying. Therefore, the ratings of the largest networks are the result of a fierce struggle for market share between the main players.
Kinds
To classify networks, you need to understand what types they are divided into. The most obvious sign of classification is the goods that are presented in stores. According to this parameter, it is possible to divide the networks into mixed ones, that is, those in which the goods of different groups are represented: food, goods for the house, for the garden, for the car and beyond. This type includes, for example, the Lenta, Auchan networks. A specialized network in which only products of a certain group are represented. An example would be the Red and White network. There are also highly specialized networks that sell only certain products from any group. An example is the Svyaznoy or Euroset networks that sell only a narrow segment of digital technology. Universal networks are also distinguished, in which an assortment of goods for various purposes is presented.
There is a practice of classifying outlets by the method of organizing trade. What follows from this? In this case, a stationary retail trade network is allocated, that is, having stores specially designed for selling goods. This is the majority of retailers. A mobile trading network is also highlighted, which carries out on-site trading, for example, in the form of car shops or salespeople. Semi-stationary trade is also highlighted, which includes pavilions, kiosks, tents.
Rating of Russian retailers
Every year, different companies make ratings of the largest retailers. The parameters for comparison are usually the number of stores in the stationary retail network and the amount of sales. Typically, those companies that show the best growth or decline are also noted in the ratings. It would be interesting to make the rating “through the eyes of customers”. Although they, of course, “vote in rubles,” but still the choice of the store is often associated with economic factors, as well as with the availability of the network. So, for example, Verny or Perekrestok chains, which are widespread in the European part, are poorly represented outside the Urals. And it would be interesting to see which networks customers like and ask why. But while there are no such ratings, let's see who was the retail leader in Russia in 2018.
"Magnet"
This is not the first year that the rating has been headed by the retail chain Magnit. She is the undisputed leader in the number of stores. So, at the end of 2018, the network included more than 19 thousand outlets. The network is represented by stores of various formats. Most of her stores are "at home", there are also supermarkets and drogery stores selling cosmetics and hygiene products. Now the network has begun to develop trade in pharmaceutical products. The Magnit family is represented in almost 3 thousand settlements of Russia. Magnit is also the most profitable company among retailers. In 2018, their sales amounted to more than 1.1 trillion rubles. Throughout the year, the network tried to open new stores, worked on the service and a variety of trading formats, and this allowed them to become leaders.
Pyaterochka
The statistics on Pyaterochka are very approximate, since the company-owner of X5 Retail Group usually reports in total on all its trade brands: Pyaterochka, Perekrestok and Karusel. But it is known that in 2018 the network had 13 thousand stores. All of them are presented in the format of supermarkets. Sales amounted to about 1.1 trillion rubles. Pyaterochka is fighting for customers, offering them loyalty bonus programs, discount systems for certain categories of customers, and is developing a special system of individual discounts in accordance with the needs of the buyer.
Auchan
In third place in the ranking is the French retail chain Auchan. The retailer in Russia has a little more than 300 stores open. The main format is hypermarkets; a network of supermarkets and convenience stores is also developing. In 2018, the company's profit in Russia decreased, which experts explain as an increase in the activity of competitors. The company's revenue is about 300 billion rubles. Reduced profitability and show French shops. But Auchan is announcing the development of new formats and is developing e-commerce, not intending to give up its positions.
Dixie
The Dixy retail chain once began in St. Petersburg, and today they have 2,700 stores across the country. The network’s revenue is about 300 billion rubles per year, which is about 6% more than last year. The network is showing good performance, but it is already becoming crowded in the European part of the country, in which it is mainly represented, and access to other regions is still hindered by an undeveloped logistics system.
"Tape"
Another St. Petersburg retailer Lenta has long and successfully mastered the Russian market. Today, the company has 245 hypermarkets and 135 supermarkets across the country. The network’s revenue is almost 120 billion rubles, which is more than in 2017 by almost 11%. The network shows strong growth due to the development of new cities in which retailers favorably accept customers.
O'Kay
This Russian retail chain of consumer goods showed a slight decrease in 2018, but the retailer remains on the list of the largest food sellers in the country. Today it includes 160 stores, and half of them are “Yes!” Discounters. Revenues of stores decreased by 3% and amounted to about 160 billion rubles.
Metro Cash & Carry
The specific organization of the Metro Cash & Carry retail chain is hampering its active development. The network is focused on small wholesale buyers and the entrance to the store is limited to buyer's cards, which can only be obtained through legal entities. In total, 93 chain stores operate in Russia, and the company even had to close several stores. The company's revenue decreased last year by 16%. All this forced the network to review the procedure for obtaining a card, now anyone can get it.
"Red and White"
In 2018, the development of the Red and White retail chain made a quantum leap and surprised all experts. Today there are 5200 stores in 54 regions of Russia. The network's profit for 2018 amounted to 215 billion rubles. The network almost caught up with Magnit in opening new stores. Such a success is especially surprising because the assortment of the network consists mainly of alcoholic beverages.
"Coin"
In 2018, the Moneta Ural retail chain expanded its presence in central Russia. Today the network has about 1 thousand stores and showed a profit of 78 billion rubles. The network is represented by supermarket and discounter formats.
All leaders of the rating seek to strengthen their positions and conduct active marketing wars against each other. You can see that the retail market players are watching the competition intensely and are instantly reacting to any innovation of one of the market players. Each of them tries to attract customers in different ways, for this network they develop bonus programs, actively use sales promotion tools: various promotions, events, individual offers, work on the assortment. According to many consumers, the Auchan network offers the best service and assortment. Best uses the stock and discount tools of the Lenta network. Pyaterochka and Magnit are trying to fill the market with their stores so that the consumer does not have to go far, especially since the assortment and prices in the networks are very similar. Therefore, leaders are fighting each other already at the level of geography. And do you think the abundance of networks benefits consumers? Or just complicates the choice? Which network do you prefer and for what reasons?