Operating results
The number of new store openings has decreased slightly. In 2019, new stores will be opened with an improved layout taking into account the new customer value proposition. As of the year end, the Company had fully met its stated plans for 2018.
In 2019, the Company plans to maintain the pace of store openings at the 2018 level. Plans have been announced to open 2,000 pharmacies and develop ultra-small formats in cooperation with Russian Post.
| LFL – Revenue | 2016 | 2017 | Q1 2018 | Q2 2018 | Q3 2018 | Q4 2018 | 2018 (avg.) |
|---|---|---|---|---|---|---|---|
| convenience stores | 2.4% | -1.4% | -3.8% | -5.4% | -2.7% | 0.3% | -2.8% |
| supermarkets | -9.4% | -9.6% | -4.4% | -6.4% | -1.6% | -0.7% | -3.3% |
| drogeries | 4.9% | 0.0% | 0.1% | 0.7% | 3.9% | 6.5% | 3.0% |
| Total | -0.3% | -3.4% | -3.6% | -5.2% | -2.0% | 0.6% | -2.5% |
| LFL – Average ticket | |||||||
| convenience stores | 0.3% | 1.2% | -0.1% | -3.3% | -0.5% | 3.9% | 0.0% |
| supermarkets | -1.1% | -2.3% | -2.2% | -5.3% | -1.9% | 1.1% | -2.0% |
| drogeries | 7.5% | 1.2% | 4.5% | 2.9% | 3.8% | 4.9% | 4.1% |
| Total | -0.9% | -0.2% | 0.0% | -3.1% | -0.2% | 3.7% | 0.1% |
| LFL – Traffic | |||||||
| convenience stores | 2.1% | -2.6% | -3.8% | -2.2% | -2.2% | -3.5% | -2.8% |
| supermarkets | -8.4% | -7.5% | -2.2% | -1.2% | 0.2% | -1.8% | -1.3% |
| drogeries | -2.5% | -1.1% | -4.2% | -2.2% | 0.1% | 1.5% | -1.1% |
| Total | 0.7% | -3.2% | -3.6% | -2.1% | -1.8% | -3.0% | -2.6% |
The Company’s LFLAccording to the new method, a store is included in the LFL database 12 months after its opening date. Previously, the LFL calculation base had included stores of all formats that had operated for at least 12 months prior to the start of the last month of the reporting period. sales had remained negative over a long period. However, clear improvements can be seen with this indicator since the start of renovations and particularly with the arrival in mid-2018 of the new management team that launched the transformation program. By the fourth quarter of 2018, the Company had already seen its first positive results in the last two years in the form of growth in comparable sales.
Magnit achieved this result by improving its customer value proposition, carrying out innovations in category management, and increasing the availability of goods on the store shelves. LFL sales in the key convenience store format also demonstrated growth of around 0.3%. A steady increase in the Average ticket compensated for the negative traffic. This resulted from a significantly better quality commodity-price mix as well as inflation. Magnit Cosmetic showed the best results: LFL sales in the fourth quarter of 2018 amounted to 6.5% as the LFL of the Average ticket increased by 4.9% and traffic rose by 1.5%. LFL sales at Magnit supermarkets remained negative, although a positive trend was seen as this indicator rose from -1.6% in the third quarter of 2018 to -0.7% in the fourth quarter of 2018.