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Russian Food Market Projected to Touch US$ 227 Billion Level
Jun 19, 2007

Russian food market to exceed US$ 227.23 Billion within 5 years says Russia's largest chain of supermarkets, X5 Retail Group NV.

Russia's largest chain of supermarkets, X5 Retail Group NV, predicts the Russian food market to exceed US$ 227.23 Billion within 5 years as economic development boosts income and retailers go beyond the main cities of the country.

The X5 retail group predicts retail food sales in Russia to increase at an average of 11.29% YOY through 2011 and the top retail chains to register 42% average revenue growth as they purchase smaller competitors and consolidate the food industry.

The grocer said that it would expend at least $700 million to launch 450 new stores in 2007 and design a superstore format, with the target of "massive roll-out starting from 2009" in a news reported by St.PetersburgTimes.

Rising consumer demand for better and new products and increasing incomes has significantly enhanced the growth of Russian food retail market. Also, fast growth of Russian retail food market has inspired more investments into the food market. Russian food companies quickly started to improve their product quality, amplify their facilities of production, and renovate the equipments of production, as Russian food customers are becoming quality conscious.

Worldwide producers of foods and beverages like Coca-Cola, Mars PepsiCo, Krafts (USA), Danone (France), Nestle (Sweden), Ehrmann (Germany), Campina (Netherlands) and Sun Interbrew (Belgium) have established their local manufacturing facilities. While the Russian food market continues to be governed by foreign investors, some Russian entrepreneurs have done a lot for the development of the industry.

Competition in the Russian retail food market is rising and food trade future seems to be mostly belonging to the retail chains. Russian food retail chain appears to be relatively developed, as they are not very much different from the corresponding retail formats in Western world.

As per a research analyst at
RNCOS, "Every current situation is making the belief stronger that Russian food industry will grow in the coming future. The real income of Russians has risen, and this factor determines the market for food products and groceries".

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