X5 Retail Group, Russia’s largest retailer by sales, has lowered its forecast for full-year sales growth.
The company now expects sales for the year to grow by 35%, down from an initial forecast of 40%, blaming “unstable economic conditions in Russia and worldwide”.
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The revised forecast, announced in the retailer’s third quarter results yesterday (10 October), is despite net retail sales increasing 32% year-on-year to RUR104.9bn (US$3.3bn) in the three months ending 30 September.
The fall in sales growth is likely to arise as a result of an acceleration of promotional activity.
A statement said: “In an effort to support our customer base in an uneasy economic environment, we are increasing the pace of promo-campaign in Q4 2011 that, together with a comprehensive aged stock clearance, could adversely affect X5’s margins.”
The group also noted that customer traffic dropped 4%, but said this was offset by an 8% rise in the average basket spend.
In the first nine months of the year, the company increased the number of stores by 316 and rebranded 613 Kopeyka stores, which the company bought in a US$1.6bn deal in December.
