Russia’s second biggest food retailer Magnit said on Thursday it would open fewer stores this year and cut back on spending in a bid to improve efficiency after its net income more than halved in the fourth quarter.
Magnit, whose low-cost shops have been struggling to compete with market leader X5 in a weak economic environment, said it planned to open about 1,300 stores on a net basis in 2020, down from 2,377 in 2019.
“(The) store opening programme of the current year reflects stricter return requirements and a greater focus on operating efficiency. Closures include stores in different regions which do not meet company’s profitability and return criteria,” it said in a statement.
Magnit said most new stores this year would mainly sell home and personal care products and it would only add a net 250 outlets in its main grocery format compared with 1,195 in 2019.