Photo: Oleg Yakovlev / RBC
The second turnover of the Russian retailer Magnit will open its own pharmacies. Entry into new segment occurs on the background of slowing growth of the food market, which is essential for the company
Medicines for leaders
The second largest retail chain in Russia — Magnit will open its own pharmacies. Pilot region will be Krasnodar. About it reports the trade publication Vademecum, referring to job Postings on HeadHunter website. According to the newspaper, the first point to make in late April. The representative of the “Magnet” was not able to respond promptly to a request to RBC.
In mid-February about the plans for the development of this segment “Magnet” announced the journal “Pharmaceutical Bulletin.” According to sources, speech can go about opening 5 thousand pharmacies based in grocery stores of the retailer.
Magnit plans to open pharmacy network, confirmed RBC two sources close to the retailer. According to them, the development of the project involved the Director of the group’s retail network “Magnit Kosmetik” Sergey Goncharov. However, in mid-February, the basic owner “the Magnet” Sergey Galitsky has denied reports that plans to open a pharmacy business.
According to one of interlocutors of RBC, the “Magnet” has taken a decision on the development of the pharmacy segment after the successful development of the “a-Mega” and “so Healthy” that work in retail X5 Retail Group (“Karusel”, “Pyaterochka”, “Perekrestok”). X5 Retail Group’s main rival Magnit, which surpassed it in revenue for the fourth quarter of 2016 — 294 billion, compared to 284 billion rubles.
Pharmacy “a-Mega” and “so Healthy” in 2016 opens the distributor “SIA international”, owned by Alexander Vinokurov, the President of A1 (investment division “the alpha-Groups”). Retail business “SIA international” headed by Andrey Gusev, who previously developed the network “A5” and “Rigla”. According to previously announced plans Vinokourov expects to open about 3.3 thousand pharmacies till 2020. At the same time, X5 Retail Group has an option to purchase shares of the pharmacy division of SIA international.
The management of “Magnet” for a long time considering the possibility of entering the pharmaceutical market; discussed the possibility of involvement in the project Andrey Gusev, told RBC a person familiar with the situation.
The rate is not on products
Pharmacy retail is not the first non-core business for “Magnet”. Since 2011 the company develops a network drogerie (cosmetics, hygiene products, household chemicals) “Magnet Cosmetics.” Now this is the fastest growing segment of the business, revenue growth from him in the group structure amounted to 60% in 2016. For comparison: sales of fixed format “shop at home” grew only by 12.6% in 2016. At this rate of growth over the past year, the retailer was the lowest in 11 years, but annual profit fell for the first time in the history of the company.
When a company is in a different business segment with its own characteristics, especially in terms of regulation, this may cause cautious attitude from investors, said a senior analyst of Raiffeisenbank Natalia Kolupaeva. After all, they usually rely on the development of a segment of the market, she explains. On the other hand, Magnet is known that almost “makes inefficient steps,” she says. “If indirect evidence of the intentions of the company are true, at this early stage, there can be no question of large investments and a significant share of this business for the retailer,” she concludes.
The pharmacy market is poorly consolidated, follows from the data of DSM Group. The largest player in the market, “pharmacy chain 36,6” has a share about 7% of the market, the second largest “Rigla” — no more than 5%. Pharmaceutical market in 2016 increased by 8.8% in rubles year on year, to 611 billion rubles., and in packages of 3.4%, to 4122 million, the study says DSM.