Bbabo NET

Economics & Business News

Russia - The expert appreciated the plans of retailers to reduce the markup on basic products

Russia (bbabo.net), - 10% mark-up on socially important goods, which X5 Retail Group (Pyaterochka, Perekrestok, Karusel and Chizhik) and Tander JSC intend to introduce (" Magnet and Dixie) is absolutely minimal. Mikhail Burmistrov, General Director of INFOLine-Analytica, said this to Rossiyskaya Gazeta.

"In some cases, it will not cover the costs of retail chains. This level is significantly less than the level of costs of the chains. In fact, the chains will not earn anything on this product," the analyst said.

He recalled that the largest retailers and last year freeze markups on a number of socially important goods. "Given the strong inflationary processes, this is an expected measure. The largest retail chains, due to the scale of their business, optimization of supply chains, and the development of portfolios of their own brands, can afford to keep a margin. Plus, this creates additional opportunities for them in terms of customer traffic," he explained.

According to the expert, the policy of federal retailers will affect prices in small retail chains. "The federal chain can hold a campaign for a week, the regional network does not have such opportunities. As a result, in order to make a competitive price offer, the chain is forced to conduct an aggressive promotion on one or two items for a short period. A buyer, coming for a specific product, forms a slightly more complete basket ", - explained Burmistrov.

There is no need to expect additional pressure on the terms of deals for suppliers from the chains, the expert believes: we are talking about low-margin goods, the trade margin for which is already very low, and many food products are purchased on the basis of tender procedures or at exchange prices.

Earlier, the Federal Antimonopoly Service reported that the largest Russian retailers sent their proposals to limit food prices. Thus, Tander JSC and X5 Retail Group are ready to limit the maximum mark-up level to 10%, and the Bristol retail chain - 10-15%.

According to INFOLine, in 2020 X5 Retail Group ranked first in terms of its share in the food market - 12.64%. Retail chain "Magnit" (without "Dixy") - was in second place with a share of 8.66%. In turn, Mercury Retail Group (Bristol, Krasnoe and Beloe and until 2021 Dixy) was one of the three largest retailers - 6.6%.

Russia - The expert appreciated the plans of retailers to reduce the markup on basic products