RetailAnalysis
19 December 2016
Auchan maintains investment in Russia

As it opened its 100th hypermarket in the country, Auchan has announced that it will continue to invest as it looks to continue to grow in the increasingly important market.

Investment rises in 2016…

Underlining both the faith it has in the market and the growing importance it is playing in its short-term growth outlook, Auchan Russia’s president, Jean-Pierre Germain, confirmed that the retailer expected to invest RUB22.0bn (US$354.5 m) in Russia in 2016, up from the RUB17.0bn (US$273.9 m) it said it planned to spend. In the medium term Auchan said it would invest between RUB30.0 bn and RUB20.0 bn (US$483.4 m and US$322.2 m) to open new stores and revamp existing ones.

…As confidence in the market remains

As part of the announcement, spotlighting the retailer’s faith in the market’s future development, Germain said that while ‘… Russia's economic model has changed [due to sanctions and] …customers buy different products, they have a different consumption model. The investment budget is rising ...and we don't have a reason to lower it’.

At the company’s half year results, Auchan noted that its ‘business model and aggressive price positioning is proving very successful among consumers, and we believe more than ever that this country will be a significant contributor of revenue for Auchan Retail’, something borne out by these investment plans.

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