Lenta reportedly intends to acquire Magnit supermarkets, as revealed by Kommersant.
Hearsay Two unnamed sources claim that Magnit might sell its hypermarkets. The specifics of any deal, including what assets could be on the auction block, remain shrouded in mystery to these informants. One of them suspects that Magnit could be looking to offload all large-format operations, including hypermarkets and supermarkets, in order to focus on crafting smaller concept stores.
Both Magnit and Lenta remain mum on the matter, as reported by the newspaper. If Magnit were to ditch its supermarkets and hypermarkets, they could fetch approximately 100 billion rubles, estimates Stanislav Bibik, a partner at NF Group. Another consultant on the commercial real estate market values the properties in the range of 45,000 to 75,000 rubles per square meter. According to Kommersant, Magnit had 251 "Magnit Extra" hypermarkets and 195 "Magnit Family" supermarkets covering a total area of 922,600 square meters in March.
For Lenta, acquiring Magnit hypermarkets would be a chance to expand its territorial domination without the costs associated with building new stores from the ground up, one of the sources spills to Kommersant. It seems that Lenta is on a roll, actively looking for growth opportunities, including through similar deals, according to Mikhail Burmistrov, the general director of "Infoline-Analytics."
Keen on staying on top of business news? Jump onboard our Telegram channel at @expert_mag* #Business* #Retail**
Now, let's take a look at the potential outcomes if Magnit were to abandon its hypermarkets and supermarkets in favor of smaller format stores:
- Retail shakeup: A mass migration to compact stores might stir up a fierce competition in the convenience and neighborhood grocery segment, where long-established names like Pyaterochka (X5 Retail Group’s subsidiary) hold sway.
- Consumer effect: Smaller stores usually provide more convenient shopping experiences, potentially drawing urban consumers with fast-paced lifestyles.
- Logistics overhaul: Smaller formats mandate highly adaptive inventory and logistics systems, potentially driving innovation in the distribution process.
- Competitor strain: If Magnit were to pivot, competitors may feel the heat to rethink their store layouts, potentially leading to a reduction in the footprint of traditional supermarkets and hypermarkets.
That being said, without official confirmation from Magnit about any such strategic shift, these predictions are merely speculations. The current data indicate Magnit's ongoing presence in various retail formats but provide no definitive news about a full-scale divestment or single-minded focus on small formats.
- If Magnit were to sell its hypermarkets and supermarkets, it could trigger a significant shift in the retail industry, with competitors potentially feeling the pressure to follow suit and focus on smaller format stores.
- In the event of Magnit abandoning its large-format retail operations, it could open opportunities for other players in the finance sector, such as banks willing to provide loans for the development of smaller retail stores.
