UPDATE 1-Russia's Magnit's shares fall on disappointing Dec sales

(Corrects job title in para 5 to head of sales and trading from analyst)

* Customers trading down

* Competition from hypermarkets weighs

* Dec sales growth slows to 22.9 percent

* 2013 sales up 29 pct

MOSCOW, Jan 10 (Reuters) - Russia's biggest food retailer Magnit (MCX: MGNT.ME - news) said on Friday that December sales growth slowed as customers chose to buy cheaper products, causing its shares to fall by more than 5 percent.

Magnit, which overtook rival X5 as Russia's No.1 grocery chain by revenue last year, said December sales growth slowed to 22.9 percent year on year, with revenue of 63.6 billion roubles ($1.9 billion).

"We see a clear trend of customers refocusing towards products in lower price segments. This trend is representative of all product categories and social consumer groups," the firm said in a statement.

Competition from hypermarkets over the holidays and abnormally warm weather also contributed to the softer December sales growth, Magnit said.

"The Russian consumer has become more sophisticated and cautious," Luis Saenz, head of sales and trading at BCS (Stockholm: BCS.ST - news) in London, said in a note, forecasting that the trading-down trend and competition from hypermarkets would persist in 2014.

Magnit said 2013 sales rose 29.2 percent to 579.5 billion roubles. The company, founded by CEO Sergei Galitsky in 1998, has said growth in 2014 is likely to slow to 25-27 percent. It now operates 8,093 stores.

Shares in Magnit were trading down 4.2 percent at 0828 GMT, having lost up to 5.8 percent earlier in the session following its sales update. ($1 = 33.2290 Russian roubles) (Reporting by Alessandra Prentice; Editing by Douglas Busvine and David Goodman)