OAO Magnit Chief Executive Officer Sergei Galitsky forecast sales will increase more than 20 percent this year as Russia’s second-largest food retailer adds stores and lures shoppers with lower prices.
Magnit, which runs discount stores mainly in towns with fewer than 500,000 people, plans to spend as much as $1 billion this year on opening 450 to 550 convenience outlets and 25 to 30 superstores, Galitsky said in an interview at a Troika Dialog conference in Moscow. He didn’t give a specific sales forecast.
Krasnodar, southern Russia-based Magnit plans to offer more discounts this year as it seeks to stabilize shopper numbers that dropped in 2009, the CEO said today.
“Traffic has been sluggish, but it’s normal because of the growing competition,” Galitsky said in the interview.
The retailer is seeking acquisitions in Belarus and Kazakhstan to add outlets outside Russia after the country agreed with the two former Soviet states to form a unified customs area as of Jan. 1, Galitsky said. “We are interested in the opportunities because of the new customs union,” he said.
Magnit’s sales climbed 28 percent last year as the retailer added 646 outlets, boosting its network to 3,228 stores. At stores open at least a year, the value of purchases declined 1.5 percent in 2009, the company reported Jan. 12.