Russian retailers prefer building to buying
Russian retailers prefer to expand by opening their own stores, rather than acquiring competitors. X5 Retail Group, the country’s largest supermarket company, and main competitor Magnit are among retailers that are adding stores to gain market share. The scarcity of potential targets has made takeovers too expensive.
The country’s 10 main retailers control about 5% of the market. Bureaucracy, rising competition and a lack of infrastructure are the main barriers to expansion. Companies are also hampered by shortages of workers and space for stores and warehouses.
Russia's economy is swelling for the 10th straight year as soaring energy prices boost revenue from exports of crude oil and natural gas. The country’s €278 billion retail market is expected to expand by 22% per year through 2010 as household incomes increase about 15%.
