X5 Group (Пятерочка). Годовой отчет за 2021 год - часть 7

50

Tatiana Rakhmanova

MANAGING DIRECTOR OF X5 READY FOOD

Dmitry Agureev

HEAD OF CORPORATE SECURITY

Svetlana Volikova

DIRECTOR OF BUSINESS SUPPORT, 
MEMBER OF THE EXECUTIVE BOARD

Tatiana joined X5 in April 2020. She is 
in charge of developing the ready-to-
eat business line, working together 
with the Group’s retail formats and 
other services. X5 Ready Food 
ensures a sufficient supply of ready-
to-eat foods from internal and 
external suppliers and seeks 
innovative solutions and growth 
opportunities for the category.  

Tatiana has a solid track record in the 
HoReCa sector. Before joining X5, she 
spent four years heading up the 
Tanuki restaurant chain in Russia and 
abroad. Prior to that, she was in 
charge of operations and uniformity 
for Shokoladnitsa coffee shops 
across Russia, managed the PRIME 
cafe chain and supervised regional 
operations at McDonald’s. Tatiana 
holds a degree in Physics from the 
Moscow State Pedagogical University.

Dmitry has 29 years of 
experience working in 
government and corporate 
security, including leading 
Russian and international 
companies. He started his career 
in the Intelligence Service of the 
Russian Federation. Prior to 
joining X5, he was the security 
director for Volvo Group Russia, 
Ukraine and Belarus and also 
held security positions at 
Gazprom and Transneft. Dmitry 
holds degrees from the Moscow 
Suvorov Military School, the 
Serpukhov Military Command-
Engineering College of Nuclear 
Missile Forces and the Russian 
Intelligence Service Academy, as 
well as a Volvo MBA.

Svetlana joined the X5 team in 2007. 
Today she is responsible for 
overseeing the business units that 
handle transportation and direct 
import, as well as the construction, 
leasing and development of real 
estate assets. Svetlana has held 
various positions within X5’s 
Corporate Centre and retail formats, 
including the General Director of 
Karusel. From 1996 to 2007, she 
held positions at Auchan and 
Danone. Svetlana graduated from 
the Higher Institute of Management 
in Paris, France. She qualified as an 
ACCA accountant in 2009. 

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We continued to develop Pyaterochka in 2021, 
offering reliable, modern and accessible food. It was 
often the closest place to shop for the millions of 
Russians who live in the catchment areas of our 
17,972 Pyaterochka stores. We also expanded the 
reach of our online express delivery food offering to 
953 stores. 

While we maintain a focus on implementing a digital 
transformation of our business, we are also aware of 
the challenging macroeconomic situation and 
changing market landscape. We took measures to 
adapt Pyaterochka’s CVP and optimise renovations 
costs for new concept stores. While our stores 
continue to offer unique and attractive features like 
freshly baked bread and coffee, we are also 
conscious that Russian consumers are increasingly 
trading down and becoming more rational shoppers. 

In addition to ongoing adaptations to the CVP and 
expansion of our digital offering, Pyaterochka has 
taken measures to digitalise business processes that 
will help us to achieve sustainable improvements on 
costs, including scaling up our use of big data 
powered planning tools, technology solutions to 
improve logistics operations and an innovative 
online platform that enables us to coordinate 
individualised promotion campaigns with suppliers.  

Looking ahead, we hope to provide our customers 
with the best proximity store shopping experience 
while maintaining our reputation for low prices and 
reliable quality. 

Vladislav Kurbatov

GENERAL DIRECTOR OF PYATEROCHKA

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17,972

Stores in operation

+7.6% 2020/21

2021 performance highlights

992

Stores refurbished

5.0 

BLN

Customer visits

+7.9% 2020/21

5.6

%

LFL sales growth

4,501 

Stores operating under 
new concept

25% of store portfolio

47.1 

MLN

Active loyalty card users

+5.5% 2020/21

7,048 

THS

SQM 

Selling space

+7.7% 2020/21

11

NPS

+6.3 2020/21 

69

%

Loyalty card penetration 
in traffic

OPERATIONAL 
METRICS

409

RUB

Average ticket

+4.0% 2020/21

1,795 

RUB

BLN

Revenue

+12.3% 2020/21

8.1

%

EBITDA margin

(pre-IFRS 16) 

CUSTOMER 
METRICS

FINANCIAL 
METRICS

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2021 strategic highlights 

Increase personnel engagement

Staff turnover decreased by 4.7 p.p.

A pilot of the Pyaterochka shop director 
entrepreneurial motivation programme was 
launched. Developing an entrepreneurial approach 
helps combine the potential and interests of shop 
directors with X5 Group's development goals

25% of Pyaterochka stores (4,501) were operating under 
the new concept as of 31 December 2021

Capex reduced per sqm for new concept refurbishments

Double-digit LFL growth for new concept stores 
vs old concept

NPS of new concept Pyaterochka is 1.4× higher than 
for old concept

Pyaterochka mobile app and website had 10.4 million 
MAUs in December 2021, up 27% year-on-year

Express delivery continued rapid rollout across 
Pyaterochka geography of operations, with services 
in 50 regions

Pyaterochka express delivery orders rose
3x year-on-year to 10.7 million in 2021

Shrinkage level decreased by 17 b.p

Labour productivity in December 2021 improved
by 17% year-on-year

LFL sales grew by 5.6% year-on-year in 2021

FURTHER IMPROVE OPERATIONAL 
EFFICIENCY AND SHRINKAGE

ROLL OUT NEW CONCEPT 
AND ADAPT CVP

LEVERAGE BIG DATA TOOLS AND 
OMNICHANNEL CAPABILITIES

INCREASE PERSONNEL 
ENGAGEMENT

Personnel engagement increased by 6% year-on-year

Staff turnover decreased by 4.7 p.p.

A pilot of the Pyaterochka shop director entrepreneurial 
motivation programme was launched. Developing 
an entrepreneurial approach helps combine the potential 
and interests of shop directors with X5 Group's 
development goals

INCREASE CUSTOMER TRUST 
AND LOYALTY

For the second year in a row, Pyaterochka was 
named the most loved brand by consumers in 
Russia during the COVID-19 pandemic. We beat 
not only competitors in proximity food retail but 
also local and international giants from other 
industries such as Sber, YouTube and Yandex.

In 2021, Pyaterochka also climbed to #6 in the 
ranking of the most valuable brands in the 
Russian market according to BrandFinance.

NPS level improved by 6.3 
points in 2021

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Key operating results

Adaptation and rollout of new CVP

Net sales by region, 

%

CAGR

2021

2020

2019

2018

2017

Number of stores, eop

Net retail sales, RUB bln

Selling space ’000 sqm, eop

Customer visits, mln

12.5%

15.7%

12.3%

11.4%

17,972

1,794

7,048

5,029

16,709

1,597

6,542

4,662

 15,354

1,367

5,975

4,460

13,522

1,198

5,291

3,913

11,225

1,001

4,427

3,267

44.5

21.1

13.0

7.9

7.9

4.3

1.3

2021

46.0

20.8

13.7

7.6

7.1

3.6 1.1

2020

Ural FD

Volga FD

Siberian FD

North Caucasus FD

North-Western FD

Central FD

Southern FD

STRATEGIC 
PRIORITIES 

Continue to refine CVP to reflect changing 
demand in challenging macro environment 

Maintain focus on reducing shrinkage and 
labour productivity 

Support “employer brand” to attract 
personnel in tight labour market

Optimise capex for new openings and 
refurbishments

Invest in further automation and 
data-driven tools to achieve sustainable cost 
savings and reduce exposure to higher costs 
as a result of labour shortage

Continue implementing sustainability strategy, 
including focus on increasing use of 
renewable energy and decreasing carbon 
footprint 

We reached the milestone of 25% of Pyaterochka 
stores operating under the new concept in 2021, 
bringing the total to 4,501 stores operating under the 
new concept as of 31 December 2021. 

With a modern and comfortable interior design, the 
new format stores offer optimised shopping routes for 
different shopping missions, as well as up-market 
features such as in-store bakeries, coffee and fresh 
juice points, healthy food assortments, and an 
expanded ready-to-eat and food-to-go offering.  

We have developed a flexible matrix of Pyaterochka 
store formats with a variety of services and renovation 
requirements depending on a number of factors, such 
as location, traffic, etc. 

Thus, store opening costs depend on the set of 
services it offers (oven, coffee machine, juicer, etc.). 
The decision to use one service or another is left to 
the macro-region's discretion. 

NPS 11 

+

6.9

points y-o-y

We are also working on further increasing the share of 
private label goods in our assortment, enabling us to 
offer customers a range of goods at competitive prices 
while maintaining a reliable level of quality that they 
can trust. In 2021, the share of private labels in overall 
sales at Pyaterochka amounted to 23%. 

We are changing our approach to private labels:  

We accept zero compromise between price and 
quality, and offer the best price to value in our stores. 

Development of innovative products based on 
consumer research.  

One supplier per product for local supplies within 
a region.

We conducted more than 100 advertising campaigns, 
both independently and in cooperation with suppliers. 
This helped us to maintain parity in SOV (share of 
voice) leadership in the food retail market against the 
backdrop of greater investment by key competitors.   

Pyaterochka made important progress in further 
strengthening the trust of our guests, based on 
independent ratings like Romir, where we were #1, and 
internal research ranking Pyaterochka in 20th place, 
which is an improvement of four places among all 
food retailers in the country as of Q3 2021. This was 
achieved through the rollout of the new concept and 
communication related to the updated format, as well 
as social projects such as from Basket of Kindness 
and Liza Alert and joint environmental-themed 
activities with suppliers.  

As a result of around 200 joint campaigns with 
suppliers, we managed to implement ESG goals, 
increase MAUs and customer loyalty, all of which had 
a positive impact on retail turnover.    

During 2021, Pyaterochka relaunched its loyalty 
programme: we reduced the number of points given 
out per guest by around 25% while making the 
programme more interesting. This enabled us to 
incentivise some of the customer base to consume 
more online (by increasing their check and/or 
frequency of purchases when choosing their favourite 
categories at their level, calculating the effect on 
validation). Total loyalty programme penetration in 
sales rose to 85%, and monthly active customers grew 
to 39 million (+7% year-on-year in November), and we 
increased monetisation of Pyaterochka’s customer 
value management (CVM) product.   

Throughout 2021, we worked on improving the 
efficiency of CVM with more personalised 
communication with customers through relevant 
channels. Through these efforts, we reduced the cost 
of contact by 40% in 2021 by increasing the use of 
free channels to a target of 40–50% compared to the 
previous period. 

Operational efficiency

The current macro environment has once again focused our attention on efficiency,
and we continue to work in several key directions:

Introduced shrinkage committees across macro regions 

Remote fruit and vegetable acceptance launched at DCs

Smart reduction in assortment 

Reduced inventory and losses through an end-to-end supply planning process 

Audit of store processes to simplify operations

Decrease in inventory via audits at the SKU level and promo audits 

Simplified operations

Optimal staff planning 

Efficient use of capex to open new stores

Continued development of multilayer logistics infrastructure 

Focus on improving efficiency of transportation between our own DCs

Further optimisation of rent costs with a focus on revenue-linked rent 

Shrinkage

Logistics

Rent

Lean Store

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Shrinkage 

2020

2021

−17 b.p.

 

Private label share in sales, 

%

19

2020

28

2024E

23

2021

Ready-to-eat share in sales, 

%

0.6

2020

0.9

2021

Personnel engagement

Big data and omnichannel opportunities

As part of X5’s overall digital transformation, 
Pyaterochka is implementing a number of initiatives to 
leverage advanced big data analysis in its business 
operations and to expand omnichannel opportunities 
that often intersect with digital businesses.  

In our stores, we continue to expand the 5Post 
network of parcel lockers and pickup points. These 
parcel lockers help both to drive additional customer 
traffic to our stores and offer our guests additional 
convenient services.  

As an extension of our stores, we rapidly accelerated 
the scaling up of express delivery services.   

We continue to develop our mobile app as the key 
online channel for communicating with our customers. 
Today we are the market leaders in terms of MAUs in 
absolute terms and growth dynamics. We get 
feedback from our guests via our app, and based on 
this feedback we have rotated or refined with the 
producers over 3,000 SKUs, and the average rating for 
our private label products is 4.8 out of 5.

Big data tools primarily impact our business operations 
behind the scenes, but they are key to helping us meet 
consumer demand in the most effective and most 
efficient way possible.   

Pyaterochka continues to lead the digitalisation of the 
food retail market in both communication and 
distribution channels. The total number of active 
Pyaterochka mobile app users rose to 9.6 million, 
which was the highest growth in absolute terms in the 
market. We also retained SOV leadership among brick-
and-mortar retailers. We were especially pleased with 
our successful SMM performance, with Pyaterochka 
leading the market across platforms.   

We also implement joint X5 projects, such as the 
launch of X5 Bank payment services in the 
Pyaterochka mobile app and the pilot of X5 
subscriptions at 30 stores. In addition, we are 
coordinating on promotions and recipes with Food.ru, 
including offering rebates, cooking shows, etc. 

Pyaterochka achieved a 4.7 p.p. year-on-year 
improvement in staff turnover in 2021, while labour 
productivity in December rose by 17% year-on-year. 
Our store employees are becoming front-office 
workers, and we treat them as internal customers. 
Personnel engagement increased by 6% year-on-year. 

Our investments in making Pyaterochka a good place 
to work mean that it has become easier for us to hire 
people, and we are registering increased employee 
engagement. As a result, the perception of politeness 
is rising and shrinkage is falling, meaning we are 
serving our customers better while also improving the 
profitability of our business.

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Staff turnover dynamics 

2020

2021

−4.7 p.p.

+

6

%

Personnel 
engagement

y-o-y