Four more Auchan stores might damage retail trade, Alliance claims

20 February 2008 (09:01)

'There are currently eleven Auchan hypermarkets in Moscow that welcome the capital’s ten million dwellers as well as four or five million people from Moscow Region. This means there is one Auchan store for every 1.4 million people there. At the same time, there are only 1.3 million dwellers in Yekaterinburg, and 400,000 people from the nearby towns come to the city to do their shopping. In the meanwhile, the local population’s income is 1.5 times lower than in Moscow. All this boils down to the following: one Auchan store in Yekaterinburg is enough to maintain the optimal balance among the local, regional, and foreign chain stores,’ said Alexei Podolyako, CEO Alliance Independent Partnership.

However, Auchan announced recently that the company was going to set up four more stores in Yekaterinburg. The company runs twenty-one stores in Russia altogether.

'Foreign chain stores used to enter Sverdlovsk Region’s market without affecting the local chains much, and a certain equilibrium was maintained. Four more Auchan hypermarkets might lead to some serious disproportion, as the local market might not be able to accept these shopping centers without some damage to the local business. Our population and income growth isn’t as fast as in Moscow,’ Mr. Podolyako observed.

'I believe we need to bear in mind the experience Poland had in the early nineties when foreign chain stores invaded the country and local traders and food manufacturers were forced to leave. This wasn’t felt by an average consumer, but it did make people ask themselves if Poland was still independent or self-sufficient food wise,’ he added.

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