Yakutsk, 2 April 2024 – X5 Group (“X5” or the “Company”, LSE and MOEX ticker: FIVE), a leading Russian food retailer, has launched operations of its Pyaterochka proximity store chain in the Republic of Sakha (Yakutia) under the master franchising programme, making Yakutia the 71st region in the Company’s footprint in Russia.
In Yakutsk, five Pyaterochka stores have opened at once under the reverse franchising exclusive programme, with a total selling space exceeding 2,000 square metres.[1] Our franchisee partner will provide day-to-day management of the store network in the region, while the parent company will be responsible for pricing policy, product mix, logistics and technology. The chain’s distribution centre in Krasnoyarsk will supply the Yakutia-based stores, while product storage and logistics will be handled through the franchisee partner’s own infrastructure.
The official opening ceremony for one of the new stores was attended by Maxim Karbushev, acting Minister of Entrepreneurship, Trade, and Tourism of the Republic of Sakha (Yakutia), Vladislav Kurbatov, CEO of Pyaterochka, and Evgeny Shevchenko, Pyaterochka’s franchisee partner in the region.
The new stores are aligned with Pyaterochka’s modern store concept, which emphasises the chain’s core values: fresh and high-quality products, low prices, customer comfort and a pleasant shopping experience. In addition, all stores in the region feature an ergonomic sales floor layout, customer-friendly navigation and impactful in-store visuals. The retail chain is actively deploying advanced technologies to further increase customer convenience and automate business processes. In particular, 23 self-checkouts designed by X5 Group have been installed in Pyaterochka stores in Yakutia.
The product range of each Pyaterochka store in Yakutia averages up to 5,000 SKUs. The stores also offer products sourced locally, including bread by Yakutsk Bread Factory, dairy products by Yakutsk Municipal Dairy Plant, frozen products and deli meat by Khotu-As, and other products. The chain currently works with 24 local suppliers, and in the near future a further 17 contracts are to be signed with local businesses. Ultimately, the share of Yakutian goods on store shelves will be 10%, with such products being highlighted with special ‘Made in Yakutia’ price tags.
Pyaterochka is also promoting its private-label products, which on average are priced 20% to 25% lower than similar popular brands while offering comparable quality. Private-label products in our Yakutia stores are available across virtually all categories: alcohol, groceries, beverages, dairy, confectionery, children’s goods, and frozen ready-to-cook products.
Pyaterochka stores in Yakutia have their own bakeries and coffee machines, so customers can always buy hot freshly ground coffee (black or white), bread, baguettes, as well as sweet and savoury pastry. Consumers in other regions have already fallen in love with Pyaterochka’s coffee to go and ready-to-eat meals: in 2023, the chain became the most popular place in Russian retail and the HoReCa market to buy ready-to-eat deli products.
The retail chain offers ongoing discounts to pensioners and families with children. All stores in Yakutia offer a 10% discount for pensioners (in the morning hours until 1:00 pm) and also run Family Wednesdays, when parents and foster parents of children under 13 get 20% cashback on purchases of children’s goods (as points in the X5 Club loyalty programme).
“The country’s largest proximity store network has come to Russia’s largest region, which is also one of the most remote areas in the country and hence a particularly challenging market. This is a new milestone in the Company’s history. Importantly, it is a joint project with a franchisee partner. We see great potential in engaging with entrepreneurs who are willing to team up with us to find effective business growth solutions. I’m confident that through our joint efforts, and supported by Yakutia’s leadership and local producers, we will provide further impetus to the social and economic growth of this region. All this is done to provide local customers with high-quality products at affordable prices in our stores,” said Vladislav Kurbatov, CEO of Pyaterochka.
X5 is planning to launch another five stores in Yakutsk by the end of 2024 and to expand its store network in the region to 30 outlets over the next five years. The first store openings have involved the creation of about 50 new jobs, and a total of up to 150 new jobs are expected to be created in the region by the end of 2024.
[1] Pyaterochka stores in Yakutsk are located at the following addresses:
- 13 Quarter 203;
- 6 Avtostrada 50 Let Oktyabrya;
- 30 Dezhnyova;
- 30b Kirova; and
- 74/8 Chernyshevskogo.