System Capital Management, owned by billionaire Rinat Akhmetov, launched a new company called Ukrainian Retail.
Ukraine’s richest tycoon, who controls businesses producing everything from metals, energy and top-ranked football players, is now creeping into retail – one of the country’s most dynamic sectors.
System Capital Management, owned by billionaire Rinat Akhmetov, launched a new company called Ukrainian Retail in the second half of last year, following up last month with the opening of pilot supermarkets that have yet to receive a brand.
The first pilot supermarket opened its doors on March 10 in the eastern industrialized city of Donetsk, Akhmetov’s hometown. Thirty new supermarkets are to be launched in Donetsk Region by the end of 2007, and 400 more throughout Ukraine by 2011.
The ‘official’ opening of the Donetsk store is scheduled for June.
“So-called pilot stores are opening, from which consumer demand will be studied and a system of purchases will be built up,” SMC’s press service said.
“We don’t see this sector as a main one for the group, but think that it is sufficiently attractive in the midterm,” said SCM General Director Oleh Popov.
Akhmetov is hoping to capture a share of Ukraine’s booming retail market. State figures indicate that retail sales jumped 25 percent to $24.5 billion last year.
Demand in Ukraine’s booming retail business retail demand is still largely unsatisfied, according to SCM, which doesn’t expect fierce competition.
SCM’s move coincides with the blitzkrieg of foreign retail chains onto the promising Ukrainian retail market.
Dmytro Rodenko, director of International Marketing Group, said Akhmetov’s SCM will face stiff competition in the near future from large foreign competitors which are just kicking off aggressive expansion plans.
Ukraine’s current retail leader is Fozzy Group, co-owned by Volodymyr Kostelman, with more than 200 stores and $1 billion turnover in 2006. Kyiv-based supermarket Furshet, co-owned by Igor Balenko, boasts a chain of 69 stores in large Ukrainian cities. ATB-market, a part of Dnipropetrovsk-based ATB Corporation, serves as the biggest regional chain. Founded in 1993, it includes 176 food stores in 40 cities throughout Ukraine today.
The undisputed leading foreign player on the market is Germany’s METRO Group, which launched its METRO Cash&Carry operations in Ukraine back in 2003. The German giant has pumped more than $300 million into Ukraine launching 13 wholesale mega stores throughout the country in less than three years. The leading wholesaler-retailer has also floated plans to snatch up a large share of the nation’s retail business by launching hypermarkets.
France’s Auchan, the world’s 10th largest retail group with almost 400 hypermarkets and over 700 supermarkets in 12 countries across the globe, announced plans this year to open 10 new hypermarkets in Ukraine within the next two years. On March 13, Auchan and the Kyiv-based Furshet supermarket chain inked a deal to join forces on Ukraine’s retail market.
Russian retailers have also set their sites on Ukraine’s promising retail development, which is spurred by non-stop consumer demand. Such Russian chains as Paterson and Perekrestok are already represented in Kyiv and Kyiv Region.
