MAGNIT PJSC (MGNT)
Press-release | Krasnodar | February 11, 2021.
Magnit Opens its First Dark Stores
Krasnodar, Russia (February 11, 2021): Magnit PJSC (MOEX and LSE: MGNT; the Company, Magnit), one of Russia's leading retailers, has opened two pilot warehouse stores in Moscow that only serve online orders - dark stores.
Dark stores are located in the north and east of the capital and are used for express delivery within one hour. The stores process orders made via Magnit's own delivery service, and in the near future they will be connected to partner services - Delivery Club and Yandex.Eda.
Until now, Magnit's delivery operated based on its brick-and-mortar stores. Dark stores are expected to enable the Company's online business to achieve a higher operational efficiency.
The pilot dark stores operate in a 'mini' format and have an area of 300 and 400 sq. m. Their assortment differs significantly from a standard offline Magnit Convenience store and includes products from the ranges of Magnit Family supermarkets and Magnit Cosmetic drogeries - around 6,000 to 7,000 articles in total. For example, the assortment of dark stores is supplemented with make-up and care cosmetics, beauty and health products, as well as a range of fresh meat, soft cheeses, and non-dairy soy drinks. The updated offer better meets the preferences of Magnit's Internet customers, who buy more products and choose more expensive options online than offline.
Dark stores also differ from Magnit Convenience stores in terms of appearance: their design is minimalistic, and they have no partitions on the sales floor to speed up order processing. A video surveillance system is used to monitor the quality of order picking. Access to the dark stores is granted only to employees who prepare the orders, as well as delivery couriers.
"These are the first two mini dark stores where we will test the operational processes and determine the optimal model for future scaling in Moscow. In 2020, we plan to open up to 20 such dark stores across the capital. We see a high level of interest from our loyal offline customers towards the online channel, as well as an influx of a new audience that has never shopped in Magnit before. To meet the needs of this category of customers, we are working on properly adapting our offering for online and constantly improving the customer experience," - said Florian Jansen, Magnit's Deputy CEO and Executive Director.
Magnit began developing its foodtech capabilities in 2020 in cooperation with specialized partners, joining forces with Delivery Club at the end of August 2020 and with Yandex.Eda at the end of September. In November, the Company launched its own Magnit Delivery app offering express delivery in Moscow, as well as its own regular delivery service working from Magnit Family stores in Krasnodar. So far, all of the projects are at the pilot stage, but their dynamics for the first months of operation turned out to be much better than expected. By mid-December 2020, Magnit was already fulfilling about 7,000 orders a day, and the average ticket for Magnit's own delivery was about 1,600 rubles.
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Note to editors:
Public Joint Stock Company "Magnit" is one of Russia's leading retailers. Founded in 1994, the Company is headquartered in the southern Russian city of Krasnodar. As of December 31, 2020, Magnit operated 38 distribution centres and 21,564 stores (14,911 convenience, 470 supermarkets and 6,183 drogerie stores) in 3,752 cities and towns throughout 7 federal regions of the Russian Federation.
In accordance with the unaudited IFRS 16 management accounts results for FY 2020, Magnit had revenues of RUB 1,553.8 billion and an EBITDA of RUB 178.2 billion. Magnit's local shares are traded on the Moscow Exchange (MOEX: MGNT) and its GDRs on the London Stock Exchange (LSE: MGNT) and it has a credit rating from Standard & Poor's of BB.
This document contains or may contain forward-looking statements that may or may not prove accurate. For example, statements regarding expected sales growth rate and store openings are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. Any forward-looking statement is based on information available to Magnit as of the date of the statement. All written or oral forward-looking statements attributable to Magnit are qualified by this caution. Magnit does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances.
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