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Business news
Ramstore Boldly Enters the City's Retail Ring
11.09.2004 14:52

ramstore_hypermarket The St.Petersburg Times

By Sveta Skibinsky

Staff Writer

Turkish company Ramenka marked its arrival on St. Petersburg's retail scene by opening the first of its Ramstore hypermarkets planned for the city on Monday.

The 5,200 square meter store at Gulliver shopping complex is Ramenka's 29th project in a list of supermarkets, hypermarkets and shopping centers in Russia.

Already, the company promised to open its next Ramstore hypermarket in a city residential area by the end of this year. A further shopping center will arrive by the middle of 2005, to be located next to Udelny Park.

Ramenka sees its target as 10 percent of the organized local retail market, with a total of 15 new stores planned to open in St. Petersburg within four to five years.

The city's established large retail firms assure they will not lose ground without a fight. "For a company that's just entered the St. Petersburg market, it will be very hard for them to get a ten-percent market share within a few years," said Lenta's PR officer Svetlana Shorina to business daily Kommersant.

"We have been working here for 11 years and we know our customers very well; that is one of the main qualities of success," Shorina said.

Another retail city player, Paterson plans to "intensely develop in residential areas applying an aggressive pricing policy to combat the competition," the chain's St. Petersburg director, Vladimir Prokhorenko, said to Kommersant. However, Ramstore said it trusts its variety and appeal to the mass audience to help win over the customers.

"Our target audience spans the entire range of customer segments, from very cheap promotional products appealing to budget customers, to a wide gourmet foods section with top tier prices," said Ozgur Tort, deputy director of Ramenka, and Ramstore's marketing director.

The company believes exactly such a wide appeal - a 30,000 item selection - will attract the variety and volume of customers it is targeting.

"What we understood [from our market research study] is that local consumers here have especially begun to demand variety - a European-style selection suitable for all income levels," said Tort.

The newly-opened store carries a selection of both food produce and consumer goods, with an expected 35 percent of sales to come from textiles, home goods and appliances.

Most of the items featured at Ramstore are produced locally, with over 60 percent of all goods from St. Petersburg producers. All the ingredients for the in-store bakery and ready-cooked meat sections are also purchased locally, Tort said.

In terms of consumer goods, however, most are imported from China and Europe. Surprisingly, only a few of the textiles come from the firm's base country Turkey.

"We have the benefit of offering low prices on our imported products, since we do our own importing," said Tort.

"While our layout seconds the one in Moscow shops, the product range [in St. Petersburg] is different," said Tort.

Explaining why the chain has not made its city entrance four or five years ago when other large consumer retailers, such as Pyateorochka and O'Kei, started to expand their local activities, Tort listed logistical problems and difficulties in securing suitable locations.

"Ramenka's stores had a delay in coming to St. Petersburg, but long preparations paid off," Tort said. "That's why we will be able to open another four stores [in St. Petersburg] very quickly, within eight to ten months."

The Udelny park shopping center, currently under construction, will be Ramenka's largest investment in the area, as the company is building the 35,000 square meter complex from scratch.

"The center will collect the most important famous brands from St. Petersburg and Moscow under one roof," Tort said. The complex will also feature another Ramstore hypermarket, with a 5,5000 square-meter net trade area.

Ramenka has invested about $30 million in the construction of the center, compared to $1.5-million for its store in Gulliver, where Ramenka is renting space, on par with other tenants at the shopping mall.

"That is not a large investment for us and we expect it to pay off in three to four years time," said Tort.

Beside the Udelny park complex, Ramenka said it also plans to open a 50,000 square meter shopping mall in the city center in 2006, although the location was not disclosed.

City retail representatives said, however, that they simply did not see where such a large area in the center could be secured, Kommersant reported.

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