Food Industry News

"Dixie" sits on a diet

The group's new management "Dixie" headed by Pedro Pereira da Silva launched a significant optimization of assortment in the stores. Thus, the number of positions in soft drinks and beer will decrease by 70%, confectionery products - by 50%.

On average, the network can make a reduction 45%. Due to the increase in sales the most popular goods and products of own brands fourth turnover of the food retailer expects to halt the decline in customer traffic in Russia.

Kommersant had at its disposal letters from Dixy managers to the suppliers that starting from June the network is beginning to optimize the assortment matrix. Thus, in the beverage category (beer, juice, water and other non-alcoholic beverages), the assortment reduction will be 70%, the letter says, which was confirmed by the manager of the manufacturer of mineral water and a major beer producer. A similar letter was received by one of the confectionery manufacturers: its "Dixie" informed that in this category the reduction of positions will be up to 50%, and the priority will be given to fresh categories. Optimization of the range has already begun in the alcohol group. Igor Kosarev, the vice-president of the Russian Standard holding company, said that some of the vodka belonging to Roust (which produces the brands Green Mark, Parliament, Russian Standard, etc.) fell into Dixie under the contraction. But other major vodka producers interviewed by Kommersant have not yet received notifications from the retailer about the change in the assortment.

Their actions "Dixie" in letters explain the new strategy: the network will focus on increasing sales and profitability "with each centimeter of shelf space." In the analysis of SKU (SKU) evaluation criteria will be the turnover, profitability in rubles and as a percentage, as well as covering consumer needs. The company expects, therefore, do their shopping "preferred buyers". Change of strategy retailer representatives told several major suppliers of food and personal meetings.

One of the contractors "Dixie" noted that during this conversation the network official said on the reduction of the number of SKU with thousands 4,5. 2,5 before the thousand. (Ie almost 45%). The same numbers calls to other market participants. In a presentation at the end of the year 2015 retailer indicated that the range in stores "at home", the company's basic format is 2-3,5 thousand. Items.

Two interlocutor explained that the new leadership of "Dixie" - the fourth in terms of revenue retailer in Russia - is trying to make a network hard discounter in the image of the Polish Biedronka Discount Stores, which in 2000-2010 years ruled the new president of GC "Dixie" Pedro Pereira da Silva (headed network in March this year). The "Dixie" declined to comment.

In the Polish market, Biedronka is a strong and efficient player that successfully competes with international discounter Aldi, Lidl and Netto and Tesco supermarkets, said Mikhail Burmistrov, general director of the agency Infoline-Analytics. "Compared to Russian retailers, by area, operational processes and logistics, this network is closest to Magnit, and by assortment to Pyaterochka," the expert continues. He says that optimization of the assortment matrix allows to reduce costs and improve turnover, but in some product categories it carries risks of a decrease in sales and outflow of customers that may face the inability to form a basket at the expense of their usual brands. Last year, the traffic (number of checks) of the retailer has already fallen by 3,8%, in the first quarter its decline continued at 1,6%, according to Dixy. The leader of the Russian retailer "Magnit" last year, traffic also declined - by 0,96%, but for the first three months of this year it grew by 1,46%.

At the end of 2014, "Dixie" was already beginning to reduce the assortment in order to bring to 30% of the turnover of selling its own brands, for the achievement of which it introduced its own brand "First Business", operating in the category of the first price. "Today, the retailer reduces the matrix in a short time, which is due to tightening competition between federal networks and the need to quickly improve the efficiency of working capital and reduce losses," - says the expert. At the end of April, the retailer managed 2749 stores, of which 2598 operated under the label "Disks". For the first four months of this year, Dixy's revenue increased by 18,3%, to 100,6 billion rubles., In April, the turnover growth accelerated to 23%.

See also ... 13/05/2016 “Dixy”: Turkish fruits can be quickly replaced 16/10/2014 “Dixy” strengthens relations with suppliers 02/02/2016 “Dixy” doubled its assortment of alcoholic beverages STM25 / 11/2014 Ilya Yakubson (“Dixy”) 24/04/2014 Victoria Quarter explains revenue decline 03/04/2015 Dixy's net profit for 2014 increased by 47% 06/09/2013 Dixy doubles its net profit 12/02/2015 Socially designated products 12/12/2012 The share of the “five” of the largest retailers of the Russian Federation will grow from 18% to 30% by 2016/20/02 “Dixie” went over 2015/13/03 “Dixie” increased revenue 2015/20/05 Do bonusy2015 / 16/12, "Dixie" has sold its stake in the network "Bristol" 2015/19/02 Retailer "Dixie" has defended its pravo2015 / 08/06 In the Russian retail market has stocks of Baltic canned

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