Russia’s Store of the Future

Russian grocery retail is undergoing a period of change, prompted by a combination of internal and external disruption. The leading retailers are growing influence and market share by developing a new generation of the retail store. 

What is driving change in Russian grocery retail?

After three challenging years, shaped by a recession, high inflation and international trade sanctions, the Russian grocery retail market finally returned to real growth in 2017. Consumers, however, have emerged from this difficult period with a new set of expectations. As identified in PlanetRetail RNG’s Global STEIP report, societal changes are creating a new set of consumer preferences focused on differentiation and convenience, and technological advances, coupled with vast internet expansion, are reshaping the ways these preferences are fulfilled.

How do retailers reinvent themselves?

Retailers are responding by seeking to attract consumers to their stores through improved customer experience, value-added services and curated assortments. The initiatives, undertaken by retailers, align closely with PlanetRetail RNG’s key Store of the Future characteristics. While social in-store elements, as well as digital integration, are still at very early stages in Russia, its capabilities around product curation and frictionless experiences are at the heart of new format development.


Assortment expansion is now the most visible trend among Russian grocers, with a strong focus on fresh and in-store production. As urban and increasingly busy lifestyles (75% of Russia’s 143 million-strong population lives in cities) create a growing demand for convenience and healthy eating, retailers are boosting their offers through curated ranges of ready meals, organic and healthy products, ethnic foods, fresh ranges and offers prepared in-store. 

"Ready Food" is one of the biggest food counters at this Lenta hypermarket in St Petersburg.

Retailers like Magnit, Auchan and X5 Retail Group have been investing in their own production facilities to lock down the supply of basic categories. The breakdown in relations between Russian retailers and many of their European suppliers in the wake of the 2014 embargo on perishable goods has meant the market has created opportunity for grocery suppliers from non-embargoed countries. Many retailers have turned to Turkish, Asian and African producers for sourcing. Market leader, X5 Retail Group, is actively looking to co-operate with non-European producers and ramping up its direct imports through establishing buying offices abroad.

Beyond traditional perishables, the ready-to-eat category has seen steady growth, with retailers expanding their foodservice counters and pre-packed assortments for takeaway shopper missions. Suppliers are not yet exploiting the full potential in the packed assortment departments; however, the potential in this category is significant, as demand for ready food continues to grow.


As technology has become more accessible, Russian retailers have enhanced their capabilities around frictionless shopper missions. Aiming to save customers’ time and improve their instore experiences, retailers have been rolling out self-checkouts and testing scan & go, as well as click & collect offers. The technology that has transformed Russian grocery retail most strongly in the past few months is the smartphone. Mobile payment systems, such as ApplePay and PayPal, are also now becoming widely used among various shopper groups and accepted by large numbers of retail outlets.

Grocery retailers’ apps also enjoy great popularity, not only as an extension of loyalty schemes, but also as a means of price comparison. Russian shoppers use the apps to find best deals and, therefore, shop around. This allows retailers to inform shoppers about promotions without any additional marketing expenses and offers another route for suppliers to engage with their shopper base.


Several upmarket supermarket banners including Perekrestok (X5 Retail Group), Victoria (Dixy Group) and Azbuka Vkusa, attract customers to stores by catering to the rising demand for experiences. They offer value-added services and premium shopping experiences to all customers and add themed events, tastings and cookery classes for loyalty scheme members. These banners set out to send their customers on a discovery mission across their product ranges, inspiring and educating them along the way. Here is where brands have an opportunity to stand out and achieve wider brand recognition by offering a unique experience through closer co-operation with retailers. This can be facilitated through shop-in-shops, freestanding display units, gondola-end displays and more innovative promotions. 

Planning for an unpredictable future is challenging. PlanetRetail RNG offers go to market intelligence to:

  • Understand the reinvention of the store
  • Navigate tomorrow’s ecommerce landscape
  • Develop the capabilities needed to find growth in a digital world
  • Make effective decisions on which markets to invest in
  • Target strategies that capitalize on future growth opportunities

To identify the key capabilities needed to reinvent the physical store, please contact us by completing the “Contact us” form.

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