Russian grocery retailer O’key plans to raise up to USD500 million in a London share offer to fund expansion. O’key, which is one of the leading hypermarkets operators in St Petersburg, will launch a global offering of global depositary receipts (GDRs), with each GDR representing one share, by the year-end, it said yesterday.

“There continues to be substantial under penetration of modern retail throughout Russia and we believe we have the right business model and customer value proposition opportunity,” Chief Executive Patrick Longuet said.

Metro and Auchan will sign a partnership agreement which will mean that they will collaborate to buy private labels and economy lines, according to LSA. For Metro, the aim is to get the best buying conditions for its products which will be resold to the independent grocers which account for around 20% of its turnover. For Auchan, the retailer will gain from improved buying volumes and conditions.

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Metro Group owned consumer electronics retailer Saturn has opened its first store in Russia. The 4,700 square metre outlet is located in Moscow’s Vegas Mall, the country’s largest shopping centre. A second Saturn outlet is scheduled for Voronezh in late 2010 and several other stores are currently being planned. Metro Group’s consumer electronics arm Media-Saturn is already present in Russia with consumer electronics retailer Media Markt, which opened its first store in 2006 and now operates a network of 24 outlets.

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Sweden-based home furnishings retailer IKEA is changing its strategy in Russia to focus on existing stores rather than expansion to more sites, its new CEO for Russia Per Wendschlag has said.

No new sites will be opened in the next three to five years, and instead the retailer will pay more attention to current tenants and to upgrading and expanding the facilities. Investment will continue, Wendschlag said, but it will be funneled “into other things”. He said: “We will take a break and work with what we have.”

Yesterday, Wendshlag admitted IKEA had “made mistakes” in Russia, after the retailer was forced to delay the opening of a new store due to safety concerns and local corruption. In February IKEA sacked two executives for ignoring bribery by a St Petersburg subcontractor.

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Russia-based grocery retailer X5 expects 70% of Pyaterochka stores to be able to accept payment by bank card by 2011.

X5 successfully tested this type of payment in St Petersburg and has decided to expand it to all its Pyaterochka stores. Pyaterochka is the first Russian price-orientated store format which will accept bank cards.

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Russian mobile communication retailer Euroset has signed a multi-year agreement with Brightstar, a provider of services and solutions for the wireless industry, to assist Euroset on the sourcing of mobile devices, as well as its mobile device strategy and category management. As part of the agreement, Brightstar will also provide Euroset with various supply chain and retail operations services, while both companies will also identify and pursue joint market development opportunities. “With Brightstar’s experience and expertise from working with the world’s top device manufacturers, operators and retailers, we are expecting Euroset’s profit margin to increase,” said Alexander Malis, President of Euroset. Euroset claims to be selling more than nine million mobile handsets every year.

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Russian anti-monopoly trust FAS has postponed consideration of the application from X5 Retail Group for the acquisition of Kopeika until 22 September. X5 hopes to acquire Kopeika’s whole business, including 99.9% of shares in the parent OJSC Kopeika Trading House, Kommersant has reported. X5 had filed the application to the FAS late July before the final completion of the negotiations.

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Vodka and coke anyone?
While Russians usually drink their vodka neat in shots that may be about to change as Coca-Cola’s local bottler and distributor prepares to add vodka to its product range in September.
Coca-Cola Hellenic Bottling Company (CCHBC) has obtained a license to sell alcohol in Russia from Rosalkogolregulirovanie, the state authority for alcohol trading regulations. The licence clears the way for CCHBC to start distributing Finlandia vodka and other Brown-Forman brands when the American company’s five year deal with Bacardi expires on September 30. Brown-Forman, a family-owned firm, owns several alcohol brands including Jack Daniel’s Tennessee Whiskey, Southern Comfort, Finlandia, Jack Daniel’s & Cola, Canadian Mist, Fetzer, Korbel, Gentleman Jack, el Jimador, Tequila Herradura, Sonoma-Cutrer, Chambord, New Mix, Tuaca, Woodford Reserve, and Bonterra.
Brown-Forman and Bacardi have agreed to renew contracts for Bacardi to distribute Brown-Forman brands in Belgium, Denmark, Austria, Switzerland, Luxembourg, Portugal, and Andorra, and for Brown-Forman to continue to distribute Bacardi brands in the Czech Republic. CCHBC already distributes Brown-Forman brands in Croatia, Hungary, Serbia, and The Ukraine. This was the coke bottler’s second attempt to obtain the alcohol distribution licence.The first attempt failed due to incorrectly completed and filed documents.
In 2009 Finlandia vodka it passed the 3m-case mark for annual volume sales,fueled by growth in Poland and Russia, US-based owner Brown-Forman has said.
Growth in Central and Eastern Europe has lifted Finlandia sales above the 3m cases mark for the first time, Brown-Forman announced today (12 January). In Russia, Finlandia Vodka surpassed the largest vodka importer by selling more than 169,000 annual nine-litre cases as of February 2008, making Finlandia Vodka the no1 imported premium vodka in Russia.
Brown-Forman acquired the brand four years ago.

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Groupon, the US bargain hunters web site, has acquired the Russian copycat Darberry Inc which operates the DarBeri site. Groupon plans to rebrand the business under its own name and website design. The terms of the deal were not disclosed. Groupon, a combination of “group” and “coupon”,helps buyers band together for group discounts from retail and service companies, who agree to the deals after a critical mass of buyers has been reached.

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In 2009, major retailers opened a total of approximately 1,100 new discounters and convenience stores in Russia. According to the information agency InfoLine, 85% of these new stores are operated by four of the major retailers present on the Russian market: Magnit, which opened more new outlets than the remaining three together (639 stores opened in 2009), Pyaterochka (191), Kopeyka (56) and Dixy (54). Importantly, while shopper numbers at supermarkets and hypermarkets were falling, numbers for convenience stores and discounters were on the rise. Another trend observed in 2009 was that of owners of smaller-format retail outlets narrowing the range of products stocked and lowering their margins.
According to the PMR report Retail in Russia 2009, the economic crisis brought with it an increased propensity to save. The means by which these savings were achieved varied according to the different sectors of the retail market, however, the practices of looking for the best price on a certain product and considering cheaper alternatives were both more common than they had been before the crisis. Another trend related to saving while shopping was found in the increased popularity of open-air markets in Russia. These became more popular due to their basic, and often cheaper, range of products sold at such locations. Other trends related to consumer efforts to save money include a decline in customer traffic at stores and a decline in the average transaction value.
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