Magnit slows revenue growth to 24.3% in July
MOSCOW. Aug 10 (Interfax) - Magnit's revenue in July 2015 rose by 24.29% year-on-year to 81.669 billion rubles.
In comparison with June's performance (24.57%), last month the retailer's sales growth slowed down.
For the 7M, Magnit's revenue rose by 29.12% to 535.368 billion rubles, the company said in a report.
Magnit's main format, the chain of convenience stores, increased sales by 20.59% to 60.486 billion rubles (in June growth was 22.12%). For January-July, the revenue of the chain rose by 25.79% to 398.919 billion rubles.
Hypermarket sales rose 17.27% in July to 13.807 billion rubles, for the 7M, they rose by 22.96% to 93.179 billion rubles. Magnit Family stores increased sales by 79.13% to 3.747 billion rubles and in the 7M they rose by 97.84% to 24.084 billion rubles.
The revenue of drogerie stores rose 115.69% to 3.63 billion rubles and for the 7M it rose by 101.65% to 19.186 billion rubles.
In July Magnit opened 211 stores (net, with account of closures), including 108 convenience stores. This is almost two times higher than in July of last year, when the company opened 115 new stores.
In January-July the retailer increased its chain by 1,228 new stores. In particular 654 convenience stores were opened.
Magnit's selling space increased by 24% to 4.002 million square meters at the end of July.
In July Magnit reduced its forecast for revenue growth in 2015 to 26%-28% (the previous forecast was 28%-32%). For H1 the retailer's revenue rose by 30.04%. Like-for-Like sales rose 11.47% and LfL traffic fell by 0.02%.
The outflow of buyers is attributable to the "cannibalism" factor, when one Magnit store consumes a part of the traffic of a neighboring store, the company's CEO, Sergei Galitsky said in June. The "total economic effect" of two stores is higher than one stand alone store - and for the company, the store's profitability is more important than its traffic. "Therefore we calmly regard the decline in traffic," Galitsky said.
In addition, the fall of traffic is attributable to conditions on the market - consumer income is not rising with rising inflation, and buyers are becoming more selective in their purchases and choice of stores, the Magnit chief said.
Referencing Rosstat data, the company noted on Monday that food inflation in July was minus 0.3% in comparison with minus 0.1% in July of last year and 10.5% since the start of this year against 7.6% in the same period of last year.
Magnit is the leader on the Russian retail market by sales and number of stores. At the end of July the company's network included 10,939 stores (8,998 convenience stores, 206 hypermarkets, 115 Magnit Family stores and 1,620 drogerie stores).