Developing the Fasol Express convenience format will remain a priority for Metro Cash & Carry Russia. As CEO Jere Calmes explained in an interview with LZ Retailytics, expansion plans for the soft-franchise banner that so far operates 240 shops in the capital are ambitious. With traditional retail points still accounting for around 50% of the Russian grocery retail market, the franchise format constitutes a quick and cost-efficient way to secure market share for the wholesaler. This in an increasingly competitive environment, where minimarket competitors like Pyaterochka are crowding out Metro’s traditional client base of independent traders, or integrating upstream as with Magnit’s and Lenta’s wholesale operations.
LZ Retailytics went out into the field and visited Fasol Express in Moscow to assess the sales concept and provide you with a photo tour of the latest store design.
In our opinion, the Russian market has not yet reached sufficient maturity for fully-fledged expansion into convenience stores. So far, the more affluent consumer segments addressed by convenience USPs, ready to spend the extra rouble for increased comfort and service, have a marketable presence only in the capital Moscow. But with economic recovery dawning, the market could take off rapidly. With proximity to allow shopping on the way to or from home or work, increased service levels, pre-prepared food-to-go or ready-to-cook assortments as well as in-store cafes or bistros, the format addresses time-strapped customers looking for alternatives to home cooking and food service.
A similar concept has been tested by X5 with its Perekrestok Express banner. However, the steady downsizing of this format’s operations in recent years is an indicator that market demand has not yet taken off. However, the market potential seems high: X5 is currently building its own production capacities for food-to-go ranges. As a result, over the next couple of years we will expect increased competition for Fasol from a restyled Perekrestok Express format similar to Polish Zabka city stores.