OREANDA-NEWS  The average profitability of the largest Russian retail chains has fallen sharply. The average net profit in the industry for the first time in 4 years decreased from 2.8 to 2.4 percent, with reference to the Infoline-Analytics report, the Vedomosti newspaper reports.

By the end of 2022, X5 Group's profitability decreased from 2.2 to 2 percent. The indicators of Magnit fell by half, from 2.8 to 1.4 percent, Lenta — from 2.7 to 0.8 percent, Fix Price — from 9.3 to 7.7 percent. The profitability of Svetofor (from 2.5 to 1.8 percent) and Metro (from 6.4 to 3.9 percent) also deteriorated. At the same time, Vkusville, Mercury Retail Group, Auchan and Monetka have increased business profitability.

According to the leading analyst of IC "Veles Capital" Artem Mikhailin, the drop in margins among large market representatives is due to a change in the assortment, an increase in the cost of logistics and an increase in the share of goods that are sold through promotions. The fact that the retail chain sells more cheap goods is a response to a decrease in demand in conditions of economic instability, the expert added.