RUSSIA: X5 Retail in tie-up with the national Railway Company for proximity stores chain | Progresiv

X5 Retail Group, a leading Russian food retailer, announces the signing of a memorandum of cooperation between Pyaterochka, the Company’s proximity store chain, and Railway Trading Company (“RTC”). The joint project of launching of RTC-Pyaterochkabranded retail chain is intended to open near 300 stores in Russia. Olga Naumova and Konstantin Danilov, the CEOs of Pyaterochka and Railway Trading Company, signed a memorandum of cooperation at the Fifth International Fair of Railway Equipment and Technologies EXPO 1520.

Railway Trading Company plans to open five RTC-Pyaterochka stores by late 2015, and near 300 stores across Russia by the end of 2019. Implementation of this project is expected to create over 5,000 jobs. The project is based on the reverse franchising model developed by X5. Under this model, Pyaterochka will be involved in the store launch and opening, as well as in comprehensive operational support, including repair and maintenance, equipment, IT solutions, staff training, logistics, advertising, marketing, etc.

Railway Trading Company will be responsible for day-to-day management of the stores. The average selling space of new stores will be 350 sq m, with a product mix that includes approximately 4,000 items. Cooperation with Railway Trading Company is in line with Pyaterochka's development strategy, which aims to achieve significant expansion of proprietary stores, while also allowing for cobranding projects with major geographically-diversified companies. The partnership will also benefit Railway Trading Company by helping to improve service level for current and formers employees of Russian Railways, their family members, as well as passengers of the global railway leader.