Auchan to invest up to $360mn into its Russian network

By bne IntelliNews December 14, 2016

French hypermarket chain Auchan says it is going to increase its investment into its Russian operation from RUB17bn in 2016 to RU22bn in 2017 ($362mn). Russia is already the third most important market for the company in the world.

The retailer has become a household name in Russia and has been expanding its network steadily into Russia’s 83 regions. The company says Russia has already absorbed the impact of sanctions and solved the supply problems they threw up.

Auchan is typical of the large retailers for whom sanctions have been a boon, allowing them to undercut their smaller competition and grab a larger market share through consolidation and investment into expanding the company’s footprint. Several other large retailers have similar strategies.

Auchan entered Russia in 2002 and opened its 100th store in December 2016, reports Reuters. The company plans to open ten hypermarkets a year in Russia going forward as well as 20-30 supermarkets.

The company has already invested RUB200bn ($3.3bn) into its Russian operation and plans to invest another RUB20bn-RUB30bn in 2017 on top of the RUB22bn it invested in 2016 and RUB17bn in 2015.

It is also building a RUB2.5bn meat processing plant in the Tambov region in central Russia, which is due to open early in 2017.

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