Russia's retailer X5 Group posts 13% sales growth in 4Q20

Russia's retailer X5 Group posts 13% sales growth in 4Q20
Russia's retailer X5 Group posts 13% sales growth in 4Q20
By Vladimir Kozlov in Moscow January 25, 2021

Russia's largest retailer X5 Group reported 13% year-on-year sales growth in 4Q20 versus 15.4% growth seen in 3Q20. Like-for-likes sales were up by 5% y/y in 4Q20, while food inflation accelerated to 5.8% in 4Q20 from 4.3% in 3Q20.

As reported by bne IntelliNews, although the food retail market expanded only by 1.7% in 2020, analysts argued that coronavirus (COVID-19) related tailwinds and altered consumption patterns created an extremely benevolent environment for large chains such as X5 and Magnit.

X5 in particular had a strong head start on digital innovation and used its advantage to emerge as the largest e-grocer amid the coronavirus (COVID-19) lockdown. The group is determined to IPO its e-grocery and express delivery assets in the medium term.

In 4Q20 revenue from digital businesses totalled RU8.5bn ($113.5mn) in 4Q20, which added 1.4 percentage points to consolidated revenue growth rate. Perekrestok Vprok digital platform revenue soared 191.2% in 4Q20.

Digital business net sales as a share of X5's consolidated net sales saw the fastest growth in Moscow and the Moscow region: while the average share for 2020 was 2.2%, in 4Q20 it was 3.3% and it rose to 3.6% in December 2020, BCS Global Markets commented on January 22 while affirming a Buy call on X5 shares.

The online hypermarket Perekrestok Vprok continued to expand, with the total number of Vprok orders having exceeded 1.2mn in 4Q20, up more than 2.5-fold y/y. The average Perekrestok Vprok basket in 4Q20 rose by 12.8% y/y, reflecting the expansion in the assortment.