"Moneta recorded unprecedented earnings in the year 2020"
The Monetka retail network, a subsidiary of LLC "Element-Trade," achieved an unprecedented net profit of 3.9 billion rubles in 2020, marking a significant increase from the previous year. In 2019, the company's net profit was 2.3 billion rubles, and in 2018, it stood at 1.5 billion rubles.
The surge in profits was accompanied by a doubling of sales revenue compared to 2019, reaching 4.7 billion rubles and 2.2 billion rubles, respectively. Vyacheslav Denisov, the financial director of the network, attributed this positive trend to the impact of the pandemic on the food retail sector. With limited travel and entertainment options, consumers turned to shopping for groceries at home more frequently.
In an address at the Retail CFO 2020 forum, Denisov emphasized the importance of maintaining efficiency to capitalize on this growth. To achieve this, the company reduced costs in areas such as rent, logistics, and utilities, without raising prices. The sale of the Rait supermarket format and the decline in expenses also contributed to the growth in the company's net profit.
Additionally, Monetka earned 1.9 billion rubles from dividends generated from investments in other organizations. Founded in 2001 by Roman Zabotnov and Alexander Zherebtsov, the Monetka network now boasts over 1600 stores across Russia.
Last year, the network was outpaced by its competitors in terms of affordability, as reported by JustMedia.ru. However, the company's profitability improvements in 2020 suggest a resurgence in competitiveness.
Meanwhile, the X5 Retail Group, which operates Pyaterochka and Perekrestok, introduced the Chizhik network, inspired by the hard discounter format. Launched in Moscow at the end of 2020, Chizhik plans to expand to around 40-50 stores nationwide in 2021. Although not directly relevant to the Monetka network's performance, this news underscores the competitive landscape in the Russian retail sector.
The exceptional growth in net profit for Monetka network, due in part to increased domestic retail sales and cost reductions, indicates a strengthened competitive stance within the broader retail industry, particularly in finance and consumer goods businesses. The expansion of the Chizhik network by X5 Retail Group, reflecting a shift towards hard discounter formats, underscores the competitive dynamic in Russia's retail sector.
