Perekrestok (supermarket chain)

Perekrestok (Russian: Перекрёсток) is Russia’s largest supermarket chain managed by X5 Retail Group.

In August 2019, the chain opened its 800th store.

History
Moscow supermarket Perekrestok in the new concept of 2020

The chain was founded in 1994, when the first supermarket opened in Moscow.

In 2002, Perekrestok started expanding into other Russian regions.

In 2006, Perekrestok and Pyaterochka merged, creating X5 Retail Group while keeping the Perekrestok brand unchanged.[1]

In 2014, the chain adopted a new store concept, with state-of-the-art retail equipment, better use of selling space, and improved interior and exterior design.

In February 2020 Perekrestok has begun the roll-out of new store concept. Among the highlights of the new concept are a updated interior and exterior designs, and a selection of new services offered in-store. The new Perekrestok concept is designed to meet the needs of today's customers, including frequent purchases of ready-to-eat and ready-to-go products. About 50% of the selling space will be dedicated to fresh categories (fruits, vegetables, dairy products, cheese, deli meats, as well as fresh fish and meat) or salad bars, bakeries and cafés. A special area will be focused on the health foods category.[2]

Key metrics

As of 31 December 2019, Perekrestok managed a total of 852 stores that generated revenue of RUB 273 bn.[3]

Key operating metrics of Perekrestok (as at 31 December)
Parameter / Year 2010[4] 2011[5] 2012[6] 2013[7] 2014[8] 2015[9] 2016[10] 2017[11] 2018[12] 2019[3]
Number of stores 301 330 370 390 403 478 539 638 760 852
Selling space, '000 sq m 313 347.3 383.5 397.8 415.8 484 548.5 637.2 781.5 900
Net retail revenue, RUB bn 83.1 99.8 105.5 110.7 115.6 130.1 155.4 186.9 230.8 273
Customer visits, m 263 291 297 307 302 304 305 407 505 589

Pilot projects

In 2008, the first premium class supermarket Green Perekrestok opened in Rostov-on-Don.[13] In March 2009, the first Green Perekrestok was launched in Moscow. Some elements of the Green Perekrestok concept were later incorporated into a modernisation programme that spanned the entire Perekrestok chain.

IT and innovations

In July 2017, Perekrestok launched Smart Wi-Fi, a project to create a free Wi-Fi network in 250 Perekrestok supermarkets in Moscow.[14] The initiative enables the company to show ads and send push notifications to customers immediately after they get connected.

In November 2017, X5 introduced machine learning to bolster targeted marketing at the Perekrestok supermarket chain, and developed personalised offers for all members of the Perekrestok Club loyalty program.[15][16] The company leverages machine learning to group customers into segments based on common features and create offers for them. The system analyses groups of customers and designs personalised marketing campaigns based on demographic and several hundred behavioural factors, such as: frequency of purchases and ticket size, customer preferences, lifestyle fundamentals, acceptable price levels, favourite product categories and preferred shopping hours. Customer sensitivity to offers is predicted using various analytical models. In addition, the system picks out the most efficient communication channels for a target audience and automatically generates marketing messages.

In May 2018, X5 successfully completed a large-scale project to automate the processes of demand and replenishment planning at both stores and at Perekrestok and Karusel distribution centres. To this end, the Company redesigned its core logistics, marketing and sales processes, and introduced an end-to-end system of supply chain management, boosting forecast accuracy by 17% and increasing on-shelf availability of products by 5%. The Company also reduced inventory levels by 13%.[17][18]

In November 2019, X5 Retail Group has opened a ‘lab store’ based on Perekrestok in Moscow, to test new technologies that will enhance customer experiencе. Engineers in the lab is conduct in-store trials of electronic shelf labelling, video analytics, smart shelves, digital information panels, and self-scanning and self-checkout systems. If a technology works out in the lab, it will move on for pilot testing in Pyaterochka, Perekrestok and Karusel stores, where X5 experts will also assess the viability and impact of these technologies on sales and costs. Based on the results of the pilot stage, a final decision is made on the implementation of the new technology in X5 stores.[19]

Logistics

In 1998, Perekrestok was the first Russian retail chain to open a modern distribution centre in Paveltsevo, near the Sheremetyevo Airport.

As at 31 December 2019, 11 out of 39 distribution centres of X5 Retail Group serve the large formats of Perekrestok and Karusel.[3]

References
  1. "Company Overview of Pyaterochka Holding N.V." Bloomberg L.P. Retrieved August 25, 2018.
  2. "Perekrestok updates brand and starts roll-out of new concept for 25th anniversary". Financial Times. Retrieved April 19, 2020.
  3. "Annual Report 2019" (PDF). X5 Retail Group. Retrieved April 18, 2020.
  4. "Annual Report 2010" (PDF). X5 Retail Group. Retrieved June 17, 2018.
  5. "Annual Report 2011 (Online version)". X5 Retail Group. Retrieved June 17, 2018.
  6. "Annual Report 2012" (PDF). X5 Retail Group. Retrieved June 17, 2018.
  7. "Annual Report 2013" (PDF). X5 Retail Group. Retrieved June 17, 2018.
  8. "Annual Report 2014" (PDF). X5 Retail Group. Retrieved June 17, 2018.
  9. "Annual Report 2015 (Online version)". X5 Retail Group. Retrieved June 17, 2018.
  10. "Annual Report 2016 (Online version)". X5 Retail Group. Retrieved June 17, 2018.
  11. "Annual Report 2017 (Online version)". X5 Retail Group. Retrieved June 17, 2018.
  12. "Annual Report 2018" (PDF). X5 Retail Group. Retrieved April 18, 2020.
  13. "X5 Retail Group to launch new premium supermarket concept under the "Green Perekrestok" brand". X5 Retail Group. Retrieved August 25, 2018.
  14. "Супермаркеты «Перекрёсток» хотят больше знать о покупателях" (in Russian). Business News Media. Retrieved August 25, 2018.
  15. "X5 Retail Develops Targeted Marketing Technology". European Supermarket Magazine. Retrieved July 24, 2018.
  16. "Russia: X5, Magnit and Lenta round up". The Institute of Grocery Distribution and IGD Services Limited. Retrieved July 24, 2018.
  17. "X5 Retail Group Introduces Automated Planograms To Boost Sales". European Supermarket Magazine. Retrieved July 24, 2018.
  18. "X5 invests to optimise stores". The Institute of Grocery Distribution and IGD Services Limited. Retrieved July 24, 2018.
  19. "X5 Sets Up Lab In Perekrestok Store To Test New Technologies". European Supermarket Magazine. Retrieved April 19, 2020.
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