Discounters are viewed as economy supermarkets/convenience stores by consumers in Russia, with the product assortment primarily formed of “price fighter” items or products which have been discounted by 25-35%. Most outlets look like warehouses with a minimalistic design and unpacked goods on pallets, with the number of staff and level of service being limited.
Despite recording dynamic growth, discounters still only accounted for a small share of overall value sales within grocery retailers in Russia in 2021. In terms of value share, the category is led by Torgservis 242 LLC with its Svetofor brand.
Recognising the potential of the discounters model other players are investing in developing their own stores using the example set by players such as Svetofor. For example, X5 Retail Group NV is developing its Chizhik brand, while Magnit PAO opened its first Moya Cena stores in 2020, and Lenta OOO launched its Lenta 365+ outlets.
The discounters channel is expected to continue recording dynamic growth over the forecast period both in terms of value sales, but also in terms of the number of outlets. With COVID-19 having put a huge strain on the economy consumers are likely to continue looking for the best value for money, as well as trying to reduce their spending on essential goods.
The low level penetration of discounters presents strong opportunities for growth, with the availability of these stores remaining fairly limited geographically. Consumer awareness of the benefits of shopping in discounters also remains quite low.
Russia is the world’s largest country in terms of land mass which can place a large burden on the supply chain, which often neutralises the benefits from a high scale of production. This is a limiting factor for private label development in Russia because it limits the bargaining power of retailers and makes it hard to ensure the same quality of production in different regions of the country.
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Discounters are chained retail outlets typically with a selling space of between 400 and 2,500 square metres. Stores have a primary focus on selling a limited range of foods, beverages, tobacco and non-groceries at budget prices, regularly via private label. Discounters can be classified as hard discounters and soft discounters. Hard discounters, first introduced by Aldi in Germany, are also known as limited-line discounters. Stores are typically 400-900 square metres and stock fewer than 1,000 product lines, largely in packaged groceries. Product range available is predominantly made up of private-label brands. Soft discounters are usually slightly larger than hard discounters, and are also known as extended-range discounters. Stores typically stock 1,000-4,000 product lines. As well as private-label and budget brands, stores commonly carry leading brands at discounted prices. Example brands include Aldi, Lidl, and Dia.See All of Our Definitions
This report originates from Passport, our Discounters research and analysis database.
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