(Bloomberg) — PJSC Magnit, Russia’s largest retailer, plans to strengthen its market position by accelerating store openings just as the country’s economy enters a recession.
“We’ll have our most aggressive opening plan this year,” billionaire Chief Executive Officer Sergey Galitskiy said Tuesday on a conference call. The company plans to spend 65 billion rubles ($960 million) opening 1,200 convenience stores, 800 cosmetics stores and 90 hypermarkets, he said.
Magnit boosted sales 32 percent last year, increasing the gap over nearest competitor X5 Retail Group NV as it added 1,600 new stores. The Krasnodar, southern Russia-based retailer expects sales growth of 26 percent to 32 percent this year, depending on market conditions, Galitskiy said.
Magnit has about 6 percent of the Russian food retail market, according to 2013 figures cited by the company in a presentation this month. X5, controlled by billionaire Mikhail Fridman, has about 5 percent.
Russia’s largest food retailers Magnit, X5 and OAO Dixy Group managed to hasten revenue growth at the end of 2014 as they increased prices amid the highest inflation in five years. At the same time, the ruble’s sharp depreciation against the dollar increased their cost of food imports.
Magnit’s net income growth slowed to 14 percent in the fourth quarter from 42 percent in the first nine months of the year because of a foreign-exchange loss caused by a drop in the value of the ruble between purchasing goods and paying for them. The shares fell 2.3 percent to 11,270 rubles in Moscow.