Russia's retailer Magnit starts delivery testing

Russia's retailer Magnit starts delivery testing
Russia retailer Magnit delivery services in its battle with X5 Group for supremacy of supermarket business / wiki
By bne IntelliNews May 31, 2019

Russia's second-largest retailer Magnit launched delivery services from its stores in the southern city of Krasnodar, the company said on May 30. The collection and delivery is executed by local delivery company Broniboy.

Currently the company is testing delivery from five largest stores, with about 10,000 items available on the mobile application. Most of the retailers work with specialised collection and delivery services such as Instamart, iGooods, Golamago, SaveTime, and others, Vedomosti daily notes.

Magnit's largest competitor and market leader X5 Retail Group outsources delivery services for stores of its formats Perekrestok and Karusel, while Perekrestok also operates its own online store with in-house delivery. The main format Pyaterochka cooperates with Dostavka.Market, in test regime in about 30 stores in Moscow.

This month X5 Group continued to expand its online retail capabilities, teaming up with Courier Service Express (KSE). KSE will be delivering online orders to X5 stores Pyaterochka, Perekrestok, and Karusel, as well as door-to-door grocery deliveries.

Magnit reported a drop in net IFRS income of 52% year-on-year to RUB3.54bn ($54mn) in 1Q19, with Ebitda decline of 6% y/y and Ebitda margin decline by 110bp to 6%. "Magnit reported weak 1Q19 IFRS and trading update, significantly missing BCSe and market expectations," BCS Global Markets commented on April 30. 

In turn, X5 Group in 1Q19 posted “very strong results, beating expectations on EBITDA by 9% and net income by 21%. EBITDA margin reached solid 7.3% versus expected 6.7% - strong positive,” BCS GM said on April 25.

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