Geography of operations

Expanding our presence across Russia’s diverse regions

Russia is a diverse country with over 185 ethnic groups living within its borders. As we expand our presence into new regions, we aim to ensure that our retail formats’ customer value propositions are adapted to the needs and expectations of local communities. This is reflected in the fact that we source a significant portion of the products our stores sell from local producers, and we regularly conduct training events for local suppliers across our network of distribution centres. The share of local goods across all X5 stores reached 17% in 2017, and we aim to reach 20% in 2018. In some regions, the share of locally produced goods in Pyaterochka stores in 2017 was above 25%.

X5 continued its rapid expansion in 2017, bringing its modern food retail formats to around 500 new population centres (approximately a 25% increase in cities and towns where X5 operates compared to 2016) and six new Russian regions during the year.

Our strategy to the end of 2020 calls for rapid and profitable expansion of X5’s business in Russia, which we aim to do by:

  • Strengthening and expanding X5’s presence in our core geographies
  • Building critical mass in attractive new regions through both organic growth and tactical M&A
  • Tailoring CVP to new regions with our regional supermarket model, working with local suppliers and “clusterisation” of assortment in stores covering a small geographic area
  • Accelerating expansion into rural areas while achieving investment return criteria
  • Expanding logistics operations to support ongoing development of business in existing and new regions
  • Leveraging innovations and big data to enable our business to adapt and meet the needs of local consumers across Russia’s diverse regions
A platform for sustainable growth
Number of stores, eop 2013 2014 2015 2016 2017
Central 2,314 2,653 3,262 4,077 5,198
North-Western 644 720 845 1,095 1,416
Central and North-Western 2,958 3,373 4,107 5,172 6,614
Volga 1,002 1,368 1,848 2,468 3,169
Ural 325 405 551 764 999
Southern 201 276 418 606 874
North Caucasus 46 61 96 137 188
Siberian - - - 40 277
Ukraine 12 - - - -
Total 4,544 5,483 7,020 9,187 12,121

Note: based on federal districts of the Russian Federation

Percentage of net retail sales by federal district in 2017

X5 today

Multi-format presence in seven federal districts

11,225 Pyaterochka stores
638 Perekrestok supermarkets

93 Karusel hypermarkets
165 Express stores
Total stores 12,121
Geography of operations
Geographic Information System

We are constantly updating our in-house GIS tools, which have helped us to make efficient and informed choices about where to open new stores, including in areas where there is cannibalisation. The GIS system is constantly gaining new data, which helps us to further refine selection criteria and better predict a new store's sustainable performance.